The bombing occurred at 9 a.m. (local time) when a militant rammed his explosive-laden vehicle into the front gate of the police station in Police District 6, Interior Ministry spokesman Nasrat Rahimi said.
Dozens of houses, shops and buildings were destroyed or badly damaged due to the massive explosion, TOLO News reported. The area also houses a military academy.
According to eyewitnesses, the explosion generated a large plume of smoke that could be seen from different parts of the city, Efe news reported.
The injured were transferred to several hospitals in Kabul, Health Ministry spokesperson Wahidullah Mayar said on Twitter.
Taliban spokesperson Zabihullah Mujahid claimed the incident in a tweet, saying it was a "suicide attack targeting an enemy recruitment centre" near the police station.
Mujahid claimed that "tens of police and soldiers were killed".
The incident came after five police officers were killed on Tuesday when an explosive placed on a bicycle was detonated as a vehicle of the Counter Narcotics Department was passing by in northwestern Kabul.
These attacks coincided with the eighth round of ongoing peace talks between the US and representatives of the Taliban insurgency in Qatar, where both sides are negotiating an agreement to bring an end to two decades of war.
Despite the talks, violence has continued to grip the country with repeated attacks, including in the Afghan capital, resulting in dozens of deaths.
The UN attributed this uptick in violence to an attempt by insurgents to obtain the upper hand in the negotiations.
( With inputs from IANS )