The explosion outside the Bauchi Motor Park happened around 8:30 p.m. after a woman left her explosives-laden handbag near a bus filling up with passengers.
The bus was heading to the central Nigerian city of Jos, 125 kilometers away.
"There has been an explosion just outside the motor park and five people have been killed while more than 12 others have been seriously injured," said Adamu Saidu, an employee at the bus station.
"Some of the injured have had their limbs blown off and one of them has had his eye gouged out," said Saidu, who was involved in the evacuation of the victims to a hospital.
The woman pretended to be going to Jos and lingered around the bus, which was waiting to fill up with passengers, according to Falalu Tasiu, a grocer near the bus station.
"The woman kept talking on the phone and dropped her bag beside the bus, pretending to be waiting for the bus to fill up," Tasiu said.
"She moved towards shops overlooking the bus station as if she was going to buy something and disappeared. Moments later the bag exploded and set the bus on fire, killing five people and inujuring around 15 others," Tasiu said.
Although no one has claimed responsibility for the attack, Boko Haram Islamists have repeatedly carried out suicide and bombing attacks on bus stations and markets in Gombe and other northern cities, making the group the main suspect.
Boko Haram has in recent months been under sustained pressure from sweeping offensives
from a four-nation regional alliance of Nigeria, Chad, Niger and Cameroon.
The regional offensives have considerably weakened Boko Haram's capabilities, which has prompted the Islamists to resort to attacks on soft targets such as bus stations, markets and schools.
The explosion was the first attack since Nigeria held its presidential election at the weekend, which was won by opposition candidate Muhammadu Buhari,
who vowed to crush Boko Haram when he assumes office in late May.