Another six members of the bomb disposal team were injured in the blast, but all were expected to survive.
"We are deeply shocked by the horrible events last night," Uwe Schuenemann, the Lower Saxony state interior minister, said.
"We are mourning in deep sympathy with the families of the three men."
Explosion without warning
Schuenemann said the men who were killed were all experienced bomb disposal experts, who had defused hundreds of devices in the past.
They were called to the scene after thousands of residents were evacuated from the area. But before they could begin work, the bomb exploded without warning.
Bombs left over from the second world war are regularly found in Germany. Between 400 and 500 people are employed nationwide in removing them, and experts expect unexploded ordnance to pose problems for decades to come.
"After the war, there was a building boom, and buildings often went up in areas where there were bombs," Volker Scherff, the head of the association of German Explosive Ordnance, said.
"Those bombs are still there and when construction work is done today, the ground must always be actively searched for ordnance."
Last month, 9,000 residents of the Berlin district of Zehlendorf were evacuated when a 500-kilogramme bomb was unearthed. That discovery followed the closure of Berlin's main airport in April after a British bomb left over from the war was found nearby.
Berlin authorities believe there could be up to 3,000 bombs still buried in the city.