A statement by the Afghan Interior Ministry reported several more people were wounded, while a Defence Ministry spokesman said at least one civilian and two members of the Afghan security forces were among the casualties, adding that the target appeared to be a police post near military headquarters.
ISIS claimed responsibility in an online post.
A police officer at the scene said that the attack appeared to have been carried out by a suicide bomber on foot. A Reuters witness reported seeing several damaged cars, with possible injuries to the occupants.
Last month, ISIS terrorists killed nearly 50 people when then stormed the main military hospital in Kabul.
ISIS militants are also suspected of carrying out several deadly attacks against Shia Muslims across the violence-hit country over the past few months.
Nangarhar province, which borders Pakistan, has been the main area where ISIS has managed to carry out high-profile attacks.
The terrorist group, which is mainly active in Syria and Iraq, has recently managed to take recruits from Afghan Taliban defectors. It has also enjoyed defections from al-Qaeda in Afghanistan.
The rise of ISIS in Afghanistan has raised concerns in the country that has already been torn apart by decades of Taliban-led militancy and the 2001 invasion by the United States and its allies.