The bombing hit Al-Ataba Street, which is home to medical clinics as well as shops, also wounding dozens of people, the sources said.
There was no immediate claim of responsibility for the attack, but the Islamic State jihadist group carries out frequent bombings targeting civilians in Iraq.
Tikrit, located north of Baghdad, was the first Iraqi city to be recaptured from IS, which overran large areas north and west of the capital in 2014.
Iraqi forces retook Tikrit in 2015, and while some of it was heavily damaged, civilians have since returned to the city.