Citing the rescued woman, a top civic official said eight more persons are suspected to be trapped under the debris.
"Three bodies recovered. Two have been admitted to hospitals. Fifty per cent of the debris is removed now," Greater Hyderabad Municipal Corporation (GHMC) Commissioner B Janardhan Reddy told PTI.
Reddy said eight more persons could be trapped under the rubble. He said the rescue operation will continue well into night.
The seven-storey building at Nanakramguda in the Cyberabad zone came crashing down last night.
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All the victims in the tragedy are workers who lived at the cellar of the building. Except one family, all others belonged to Vizianagaram district in Andhra Pradesh.
Telangana Municipal Administration Minister K T Rama Rao visited the spot and announced an ex-gratia of Rs 10 lakh to the next of kin of those killed in the incident.
The state government would take tough action against the building owner for alleged violation of construction rules as well as the GHMC (Greater Hyderabad Municipal Corporation) officials "who looked the other way", he said.
Telangana Congress president N Uttam Kumar Reddy and other party leaders today visited site where the building collapsed.
In an apparent reference to Rama Rao, the PCC president said the "head of the department (Municipal Administration and Urban Development) should take the moral responsibility for the tragedy".
Earlier in the day, GHMC Mayor Bonthu Ram Mohan said the NDRF personnel along with workers of local administration are handling the rescue operations.
The rescue work took time as the way to the collapsed building is narrow.