The explosion took place in the mobile phone section of a cattle market, reported Al Jazeera.
The attack at Sabon Gari in Borno was likely to be carried out by a female suicide bomber on Tuesday.
Though no group has claimed responsibility of the blast but the islamist extremist group Boko Haram has killed hundreds of people in the area in last few weeks.
Borno State has been at the centre of an Islamist insurgency, but in recent months Boko Haram has also targeted villages and towns in northern Cameroon as well as Chad and Niger.
Bombings intensified after the new Nigerian President Muhammadu Buhari vowed to crush the group. Since he was sworn in May this year, more than 800 people have been killed.