The attack took place in Diyarbakir province’s central Baglar district, said police sources, who spoke on condition of anonymity due to restrictions on speaking with the media.
The governor's office in the Diyarbakir province said that as several suspects, who had been detained for "appropriating a factory on behalf of the PKK terrorist organization in a district", were being taken to hospital for medical checks, a bomb-laden vehicle was detonated at around 4.30 p.m. local time (1330GMT).
"Forty-five people, including 12 police officers, were injured in the explosion. Three people, who were severely injured, succumbed to [their wounds] at the hospital", the Governorship said.
The governor's office said that there were nine police officers and seven suspects in the police bus.
Meanwhile, the three people - killed in the attack - were terror suspects who had been detained for seizing a factory on behalf of the terrorist organization in the Bismil district of Diyarbakir.
A one-month-old baby was among the injured. She was injured while she was in a park with her mother.
The injured baby and her mother were treated in a hospital in Diyarbakir and their health status is fine, said hospital officials.
One out of the 12 injured police officers was severely injured, according to officials of Diyarbakir Military Hospital.
A broadcast ban on the terrorist attack was imposed by a Diyarbakir court.
PKK - listed as a terrorist organization by Turkey, the U.S. and the EU - resumed its 30-year armed campaign against the Turkish state in July.
Since then, more than 430 security personnel have been martyred and over 3,800 PKK terrorists killed.