A spokesman for Ministry of Interior, Nusrat Rahimi, said the explosion happened at around 10:40 pm.
Sources and eyewitnesses said the hall was packed with guests when the explosion happened.
The Shahr-e-Dubai wedding hall is located in police district 6 (PD6) which covers areas like Darul Aman in the west of Kabul.
Footage on social media shows women screaming outside the wedding hall, while they are shocked by the explosion.
Sources said the casualties might be high.
Wedding ceremonies in Afghanistan are often attended by more than 400 guests.