According to media reports, the blast occurred around 9.30 AM when "rejected ammunition" was being shifted.
Several people were injured in the blast.
Military experts are conducting investigations at the blast site in which there was no damage to any buildings in the establishment, IANS reported citing an official statement.
The victims have been identified as Ashok Kashinath Dubal, 51 and S. Maria Rokh, 47, both local residents in Khadki, the statement said.
The ordinance factory, one of the oldest such factories in the country, is located in Khadki in Pune.
The factory manufactures various night warfare items like pyrotechnic ammunition, for the security forces.
The facility started manufacturing these items since 1920s.
Source: Zee News