"It was not a big bang, it was a thud, but the impact was massive. The attacker was apparently walking behind us."
Sherpao's son also suffered minor injuries in the attack.
Asif Iqbal Daudzai, information minister for the provincial government, said: "We have got the severed head of the bomber, and it is identifiable. He appears to be between 30 and 35-years old."
Sherpao was the target of a previous attack on April 28, 2007. He was injured in that attack, as well.
Sherpao, 63, is also the head of Pakistan People's Party.
War on terrorism
Speaking to reporters in Peshawar, Sherpao declined to speculate on who was behind the attack but said that the "war against extremism and terrorism will continue".
Meanwhile, Kamal Hyder, Al Jazeera's Pakistan correspondent, said Sherpao had faced heavy criticism for his handling of the country's security.
He had also made enemies among the Afghan population for forcing many of them out of the country, Hyder reported.
The border province has a large community of Afghan refugees, most living in camps.
Pakistan has been plagued by bomb attacks by following a decision by Pervez Musharraf, the president, in 2001 to join a US-led "war on terrorism". There were a number of suicide attacks earlier this year, including one in the capital, Islamabad.
Musharraf himself has survived at least three al Qaeda-inspired assassination attempts.
Karzai calls Sherpao
Hamid Karzai, the Afghan president, has telephoned Sherpao, a fellow ethnic Pashtun, soon after the attack to ask how he was.
North West Frontier province is one of the most volatile regions of Pakistan.
Al-Qaeda and the Taliban have drawn support from the independent tribesmen there, particularly in North and South Waziristan, the poorest of Pakistan's seven semi-autonomous tribal regions.
A missile strike in Saidgai village in North Waziristan on Friday killed at least three anti-government fighters and wounded two others, according to an intelligence official.
On Sunday, a soldier was killed when suspected militants fired a rocket on an army post near Saidgai, intelligence officials said.