Three employees were killed and two others injured in an "accidental explosion" in one of Pakistan Ordnance Factories' (POF) plants in Rawalpindi district's Wah Cantt area on Thursday, the military's media affairs wing said.
In a statement, the Inter-Services Public Relations (ISPR) said the explosion occurred due to a "technical fault".
The injured people were shifted to a hospital, according to the statement.
The ISPR said the site has been cleared and the situation was controlled by the POF's technical emergency response team.
According to initial reports, the explosion shattered the windows of nearby homes and shops. People came out of their houses in fear after they heard the loud blast.
Rescue services, fire brigade and security officials have reached the site of the explosion.
Security sources said the routes leading to the area have been sealed.
Pakistan Ordnance Factories is the largest defence industrial complex in the country and works under the Ministry of Defence Production. It produces conventional arms and ammunition.
The POF Board's headquarters are at Wah Cantt.