The explosion, reportedly, took place in a truck loaded with fruits.
The injured, including women and children, were rushed to the nearby hospitals for treatment.
Attacks in Pakistan's second-largest city have decreased over the past couple of years but Islamist militant groups are still active there, including a suicide bombing last month that killed 25 people. The blast was heard in the radius of four to five kilometres of the site.
The authorities have launched an investigation to determine how and when the truck arrived in the area.
Sharif was at first planned to go to Lahore from Islamabad by means of the acclaimed Grand Trunk Road on Sunday, however the rally was delayed to Wednesday.
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Police and rescue officials have cordoned off the area.
The health condition of a number of those wounded in the explosion has been reported as critical. The blast has also resulted in shattering of windows in the nearby buildings which has also led to the damage in 2 and 4 wheeler that were parked near its vicinity.
Deputy Inspector General Dr Haider Ashraf quoted by the local media said the attackers might have been intending to transport the explosives to other areas of the city.
"It was a bomb blast in a fruit truck that wounded 22 persons", provincial Punjabi government spokesman Malik Muhammad Ahmad Khan said.
In February, a suicide bomber martyred 14 people, including senior police officers, when a suicide bomber hit close to the Punjab Assembly in Lahore when hundreds of demonstrators had gathered for a protest.