Yesterday's blast struck in the Sidi Bel-Abbes region 440 kilometres west of the capital, the ministry said.
The auxiliaries were members of the village guards -- a militia formed by the government in 1994 at the height of the country's devastating decade-long civil war to fight Islamist militants.
The attack was the deadliest since an April ambush claimed by Al-Qaeda in the Islamic Maghreb (AQIM) in the restive Kabylie region that killed 11 soldiers.
Those troops were heading back to their barracks after taking part in a nationwide security operation for a controversial election that brought back to power ailing President Abdelaziz Bouteflika for a fourth term.
Violence blamed on Islamists has declined considerably in recent years, but militants who battled the army during the civil war in the 1990s and later formed AQIM still operate in the Kabylie area.
At least 56 Islamists have been killed in clashes with the army since the beginning of the year, the military says.