All three individuals are employees of American Ordnance, the company that operates the plant for the Army, said Michelle McCaskill, spokeswoman with the U.S. Army Materiel Command in Fort Belvoir, Va.
The names of the victims were not released Wednesday.
McCaskill said the explosion occurred in an earth-covered bunker where ammunition is stored.
``There will be an investigation,'' she said.
Milan Mayor George Killebrew said one person was airlifted to a hospital after the 2:30 p.m. explosion.
Cathy Stringer, a spokeswoman for the Regional Medical Center in Memphis, said the hospital was treating one person with serious injuries from the blast.
The Milan plant, established in 1941, makes medium-caliber ammunition for the Army and employs about 600 workers. It covers 22,436 acres and is located about 90 miles northeast of Memphis.
No one was evacuated in the town of about 7,600 residents, and Killebrew was unaware of any evacuations at the plant.
FBI agent George Bolds in Memphis said his office, which is not handling the investigation, had been told by authorities that the blast appeared to be an accident.
``As far as we know, they were moving some barrels of some sort of volatile material and one of the barrels flashed,'' Bolds said.
Killebrew said the human cost of the blast would be difficult for the community.
``It's serious any time people lose their lives,'' he said of the possibility of multiple fatalities. ``Families suffer, fellow employees suffer. But when we have the arsenal here, it's something we're always cognizant that could happen.''
Linda Johnson of Flight Refueling Countermeasures, which rents property at the plant, said employees heard a very loud blast Wednesday afternoon.
``We're off to the side, so we don't have privy as to what's going on'' at the plant, she said.
Darrell Rinks, shop foreman at the Gibson County Highway Department, heard the explosion at his workplace about 15 miles from Milan.
``(I) heard a blast around the same time of the explosion but didn't really know what it was,'' he said.
The plant got an $11 million contract in February 2003 to load, assemble and pack M918 cartridges, a 40 mm training cartridge used in grenade machine guns.
