Dozens were also wounded in the attack which struck in front of an Islamic courthouse where a market is located, the Britain-based Syrian Observatory for Human Rights said.
The group said the toll was likely to rise in the attack, which was the latest in a string of bombings to hit Azaz.
In November, rebels said 25 people -- civilians and opposition fighters -- were killed in a car bomb attack on a rebel headquarters.
The jihadist group is present elsewhere in Aleppo province and has sought to advance on Azaz in the past.
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In October, at least 17 people were killed in a car bomb attack on a rebel checkpoint, the Observatory said.
The blast comes as a fragile ceasefire is being observed across much of Syria.
The truce negotiated by regime ally Russia and rebel backer Turkey does not include the Islamic State group or former Al-Qaeda affiliate Fateh al-Sham Front.
More than 310,000 people have been killed in Syria since the conflict began with anti-government protests in March 2011.