According to the police report, among the injured are Chinese students who are studying in the city. The interior ministry said the students were lightly injured; BFM reported that two were in serious condition.
The incident happened about 4 pm local time, outside a business high school, le Lycée Saint-Exupéry, French media report.
The driver of the vehicle, a 28-year-old man, was known to police for committing minor offences but was not on a terrorism watchlist, the sources said.
The driver attempted to drive off but was stopped by police and arrested straight away. However, the man had been in conflict of the law in drugs-related cases.
The injured students were all aged between 22 and 23. All three were transported to Purpan Hospital in Toulouse.
Toulouse Mayor Jean-Luc Moudenc tweeted (in French): "Very shocked by the aggression towards the students in Blagnac".
A auto was driven into a group of students in an attack in France. It is not clear as of now whether it is a terrorist attack or not.