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The blast occurred in a crowded market place in an ethnic Hazara area of the city.
It is the second major attack on Quetta's 600,000-strong Hazara community in five weeks.
A twin suicide bomb attack at a crowded snooker club on 10 January killed at least 92 people and wounded 121.
The banned Sunni militant group Lashkar-e-Jhangvi claimed responsibility for the January attacks; and has reportedly claimed responsibility for this latest bombing.
The bomb went off in a market area housing grocery stores, vegetable shops, language schools and a computer centre.
It happened in the late afternoon as people, mainly women, were shopping for groceries and children were coming out of their classes.
The district is dominated by ethnic Hazaras, who mostly belong to the Shia Muslim minority in Pakistan.
It was not clear where the bomb was placed, but Quetta police chief Mir Zubai Mehmood told the media that the explosives weighed as much as 1,000kg - a larger amount than was used in January's attack
The blast brought down nearby buildings, and police said they fear some people remain trapped under the rubble.
Victims were rushed to hospitals in the area, and some were flown to hospitals in the southern city of Karachi, police said.
"I saw many bodies of women and children," an eyewitness at a hospital told Reuters. "At least a dozen people were burned to death by the blast."
Angry crowds are reported to have gathered in the area immediately following the blast, pelting police and initially refusing to let them and rescue workers reach the scene of the blast.
The police raised the number of casualties several times through the day.
Quetta is the capital of Balochistan province, which borders Iran and Afghanistan, and has been plagued by a separatist rebellion as well as sectarian violence.
The city's minority Shia community have been angered by what they say is a lack of protection for them against sectarian attacks by Pakistani Sunni militants.
Hundreds of Shia Hazaras in Quetta have been killed in such attacks over the last several years.
Following the attacks on 10 January, families of the victims refused to bury their dead until they received assurances of security from the authorities.
Following talks with Shia representatives from Quetta, Pakistan's Prime Minister Raja Pervez Ashraf sacked Balochistan's chief minister and promised them better security.
In the past Shia leaders and human rights campaigners have accused Pakistan's government of incompetence or collusion, the BBC's Orla Guerin reports from Islamabad.