Javed Faisal, who is spokesman for the provincial governor, says police stopped a suicide car bomber at the checkpoint near a branch of New Kabul Bank. The bomber then detonated his explosives.
Dr Mohammad Wali of Kandahar Hospital said at least five were killed and 25 wounded. He says ambulances are still bringing more victims in.
There was no immediate claim of responsibility for the Saturday morning attack, but suspicion will likely fall on Taliban militants.
The Taliban are especially strong in southern Afghanistan, which is dominated by the ethnic Pashtun community whose members form the bulk of the insurgency in the country.