Military officials and medics said dozens more were wounded in the attack that targeted a crowd of servicemen who had gathered to collect their salaries near a base in northeastern Aden.
"The number of those killed has risen to 48, while 84 others were wounded," Aden health chief Abdel Nasser al-Wali told AFP.
Wali had initially given a toll of 40 dead, warning that the number was likely to increase due to "critical cases."
Sarea said the bomber "took advantage of the gathering and detonated his explosives among them".
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Images from the blast scene showed blood stains and scattered shoes across the sandy ground.
IS claimed responsibility for the attack, saying in a statement that a "martyrdom seeker" had gotten through security checkpoints before blowing himself up.
The attack comes eight days after a similar bombing at Al-Sawlaban claimed by IS killed 48 soldiers and wounded 29 others.
IS and its jihadist rival Al-Qaeda have taken advantage of a conflict between the government and Yemen's Huthi rebels, who control the capital Sanaa, to bolster their presence across much of the south.
The two extremist groups have carried out a spate of attacks in Aden, Yemen's second city and headquarters of the internationally recognised government whose forces retook the port city from the Huthis last year.
But Al-Qaeda has distanced itself from the December 10 attack, claiming that it tends to avoid "the shedding of any Muslim blood" while focusing on fighting the "Americans and their allies."
Washington regards Al-Qaeda's Yemen-based branch as its most dangerous and has kept up a long-running drone war against its commanders.
In August an IS militant rammed his explosives-laden car into an army recruiting centre in Aden, killing 71 people in the deadliest jihadist attack on the city in over a year.
A Saudi-led coalition has since March 2015 supported loyalist forces fighting the Huthis.
The Yemen war has killed more than 7,000 people, about half of them civilians.