Zemeri Bashary, the Afghan interior ministry spokesman, said Friday's the attack began shortly after noon in Kandahar province when a roadside bomb exploded near the bus.
Some of the labourers may have been killed by the bomb, while others were shot by insurgents who attacked the panicked workers with gunfire, he said.
Bashary said 19 construction workers were killed in the attack and three wounded.
The ambush, in Shorabak district, occurred in a remote area of southern Kandahar province that borders Pakistan, some 180km south of Kandahar city.
Oil tankers torched
Early on Friday five oil tankers supplying fuel to foreign forces in eastern Afghanistan were set ablaze in an attack that left one man dead.
A group of men armed with guns and rockets attacked the tankers in Nangarhar province as the drivers were sleeping having just crossed over from Pakistan.
An assistant driver in one of the tankers died.
In a separate incident, a roadside bomb struck a British military vehicle in the southern city of Lashkar Gah, the capital of southern Helmand province.
The vehicle was badly damaged but there were no injuries to soldiers.
More troops backed
Meanwhile, Francesc Vendrell, the EU's special envoy to Afghanistan, has backed calls by Nato commanders to send up to 2,500 more troops to the volatile southern provinces, saying it was vital to push for a quick military victory over the Taliban there.
Vendrell said the troops could help speed up a push to defeat Taliban fighters in the south before the onset of winter, or by the time Britain hands over command of the Nato operation in February.
Vendrell said: "I can understand the urgency they feel to get some extra troops and also helicopters and some other equipment.
Afghan and foreign forces face a
resurgent Taliban in the south
"[It's] precisely to see if by the end of the British command and perhaps, in terms of the weather, by the end of November, if we can really turn the corner."
He said the EU and other international donors also had to be quicker in helping establish good quality local administrators and speedy aid to reconstruction aid to areas secured by the Nato military forces.
Vendrell said: "The problem has been that not enough flexibility exits. When we have a good governor deployed to a far away province we often fail to immediately send enough funds and create enough projects so that this governor proves himself to be a success."