The blast took place when security personnel were dismantling an explosive device in Nasr City on the edge of Cairo, the source said.
The incident came two days before Egypt's minority Coptic Christians celebrate Christmas on January 7.
It also comes ahead of a Christmas mass on Sunday at the Cathedral of Nativity in Egypt's New Administrative Capital.
President Abdel Fattah al-Sisi is set to attend the mass and inaugurate the Cathedral.
Coptic Christians, who account for around 10 percent of Egypt's population, have been targeted in a string of Islamic State group attacks in recent years.
More than 100 Copts have been killed in jihadist attacks since December 2016.
IS claimed an assault in early November which killed six Copts and one Anglican in the central province of Minya.
The police later said 19 suspected jihadists linked to the attack had been killed in a shootout.
IS also killed more than 40 people in twin church bombings in April 2017, and an IS gunman in December that year killed nine people in an attack on a church in a south Cairo suburb.
The country has been under a state of emergency since April 2017.