Jamal al-Din Shahristani, an official at the Imam Hussein (P.B.U.H.) shrine, said an engineer working on a project between the site and the Abul-Fadl al-Abbas shrine blew himself up, causing fatalties.
A police colonel and employee of a Karbala hospital put the toll from the bombing in the city south of Baghdad at 2 killed and 11 wounded.
The shrines are among the holiest sites in Shiite Islam, and they are visited by millions of pilgrims from Iraq and abroad each year.
Sunni militants frequently target Iraq's Shiite majority in a bid to increase sectarian tension and undermine the country's Shiite-led government.
No group claimed responsibility for the latest bombing but suicide attacks are a hallmark of al-Qaeda's front group in Iraq.
Iraq was wracked by bloody sectarian conflict following the 2006 bombing of a Shiite shrine in Samarra, north of Baghdad, but tensions in the country have since decreased.
Violence has fallen considerably compared to past years, although attacks in Iraq remain common, killing 220 people in February, according to an AFP tally based on security and medical sources.