Provincial governor spokesman Attaullah Khogyani said the blast took place early this morning in police district four of the City.
Eyewitnesses said the blast occurred inside a shop and as a result five people were injured.
The health condition of two victims reported as critical.
No individual or group has claimed responsibility for the incident.
Nangarhar is among the volatile provinces in east of Afghanistan where both Taliban and Daesh insurgent groups have a presence.