Some 7,000 residents from around the area in the central German town of Goettingen, where the 1,100-pound bomb was found, were still being evacuated when it blew up late Tuesday.
Construction workers had found the 65-year-old explosive device about seven yards below the ground on an empty lot where the city is currently building a sports arena.
The three dead men, aged 38 to 55, were experienced in defusing bombs and it was not clear why it exploded, Goettingen Police President Robert Kruse said at a press conference Wednesday. He said two other experts were severely injured and four others were treated for shock.
City spokesman Detlef Johannson said team was still preparing to remove the detonator when the bomb exploded.
Unexploded bombs from Allied bombardments and World War I are found regularly in Germany. Only a few days before, another bomb was found in Goettingen was successfully defused.
Every German state has dozens of specialists trained to defuse old bombs, and accidents are rare. Hundreds of police and fire fighters are usually involved in helping evacuate people before experts attempt to defuse a bomb.