"We have so far recovered six dead bodies. We are still working at the scene, so the casualties may rise," Danlami Ajaokuta of the blast on the Baga Road, which happened at 5:30 pm (1630 GMT) told AFP.
Maiduguri has been a regular target for Boko Haram Islamists since the group began its insurgency six years ago and has been hit four times since last Friday.
Early on Saturday, the militants launched an attack with rocket-propelled grenades that was repelled by the military but hours later a suicide bomber killed 26 at a city mosque.
The spate of attacks came after new President Muhammadu Buhari took office on Friday and described Boko Haram as "godless" and "mindless" in his inaugural speech.
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Ajaokuta, a civilian vigilante who works in the Baga Road area, said the blast happened at a garage opposite a military unit and it appeared to have been caused by explosives left nearby.
One mechanic, who asked not to be identified, added: "I had just gone to get water when the explosion happened. I would have been among the victims.
The mechanic did not give a death toll. Ajaokuta said one suspect seen nearby before the blast was taken away by soldiers.
Buhari, who himself survived a suspected Boko Haram attack in the northern city of Kaduna last July, has pledged to move the military's command centre from the capital Abuja to Maiduguri.
Maiduguri holds special significance for Boko Haram. The group was founded in the city in 2002.