"The blast was caused by a vehicle packed with explosives close to Kizilay square," an official statement said. The square is a key commercial and transport hub close to the city's embassy area.
Ambulances rushed to the scene on Kizilay square, a key commercial and transport hub close to the city's embassy area, where the blast reduced several vehicles including a bus to burnt-out wrecks.
The attack comes just weeks after the city was hit by a suicide car bombing on February 17 targeting the military that killed 29 people, claimed by a dissident faction of the outlawed Kurdistan Workers' Party (PKK).
According to medical sources, the wounded had been taken to 10 different hospitals around the city, with a dozen said to be in a very serious condition.
Witnesses said smoke could be seen rising above the area from a distance, and square Kizilay has been closed fearing a possible second explosion.
Turkey's TV watchdog has declared a broadcasting ban on images of the scene and victims.
Turkey has been hit by a spate of deadly attacks since the middle of last year, most of them blamed on the Islamic State (IS) group, including a double suicide bombing in Ankara in October that left 103 people dead.
Today's attack will raise fresh questions about Turkey's ability to manage the twin security threat posed by IS and Kurdish rebels, as Ankara presses the European Union to speed up its membership process in return for help with the migrant crisis.
The Kurdistan Freedom Falcons (TAK), linked to the PKK, said it carried out the February bombing in Ankara as revenge for operations by the Turkish military in the southeast of the country and warned foreign tourists not to visit the country.
A two-year ceasefire between the government and Kurdish rebels collapsed in the middle of last year and since December security forces have been waging a major campaign against the PKK in the southeast of the country.
Strict 24-hour curfews were imposed in a number of Kurdish-dominated towns and cities to allow the military and police to pursue the fight against fighters who had dug trenches and put up barricades.
Today's attack came hours before curfews were due to take effect in two more towns in the southeast as a prelude to fresh military operations.
Authorities said restrictions would be slapped on Yuksekova, near the Iranian border, and Nusaybin, on the frontier with Syria, to "restore order and security" following an increase in "terrorist activity".
Earlier on Friday the US embassy in Ankara warned its citizens over a potential terror attack against 'government buildings and housing located in the Bahcelievler area' in the Turkish capital.
This is the third major blast in the Turkish capital since last October.
On October 10, 2015, alleged Islamic State (IS) militants bombed a peace rally near Ankara Railway Station near a major city thoroughfare, killing at least 103 people.
On February 17, a suicide car bomb targeted military shuttles in the capital city, killing at least 29 people and injuring 81 others.