"There has been an attack on the Damaturu Central Motor Park by a female suicide bomber," said Marcos Danladi, the police commissioner of Yobe State, of which Damaturu is the capital.
"So far, seven people have been confirmed dead and 32 others injured," he told AFP.
Witnesses said the assailant entered the motor park in a vehicle, got out and walked towards a small grocery store at the end of the terminal.
The shop owner told AFP that an angry mob prevented emergency workers from evacuating the remains of the bomber.
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"They gathered the pieces (body parts) and set them on fire," he said.
While there was no immediate claim of responsibility for the attack, suspicion immediately fell on Boko Haram.
The Islamists militants have been blamed for increasingly using women and girls as human bombs across northern Nigeria.
Bus parks have been among the group's preferred targets through its six-year uprising aimed at creating a hardline Islamic state in the north.
Boko Haram has also emerged as a growing regional threat.
The group launched its first ever attacks inside neighbouring Chad and Niger this month, seen as a response to those two nations joining Nigeria and Cameroon in a military offensive designed to crush the uprising.