Attackers hijacked a pizza delivery vehicle, loaded it with explosives and left it outside the city-center courthouse on Saturday evening, the Police Service of Northern Ireland said. The device exploded as police, who had spotted the suspicious vehicle, were evacuating the area.
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The force said a warning call was made to a charity in England and passed on to police minutes before the explosion.
Police released surveillance camera footage of the car being parked in front of the courthouse, and of the driver sprinting away. Images also showed a group of young people walking past the car shortly before it blew up.
Assistant Chief Constable Mark Hamilton said the bomb had been a "crude" and unstable device and called the attack "incredibly reckless."
"The people responsible for this attack have shown no regard for the community or local businesses," he said.
Hamilton said the "main line of inquiry" was that the bomb had been planted by a group known as the New IRA.
More than 3,700 people died during decades of violence before Northern Ireland's 1998 peace accord. Most militants have renounced violence, but small groups of IRA dissidents have carried out occasional bombings and shootings.
Northern Ireland's power-sharing government has been suspended for two years because of a dispute between the main Protestant and Catholic political parties. Uncertainty about the future of the Irish border after Brexit is adding to tensions.
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Politicians from both sides of Northern Ireland's political divide condemned the attack.
John Boyle, who is mayor of the city also known as Derry, said violence "is the past and it has to stay in the past."
Arlene Foster, leader of the pro-British Democratic Unionist Party, called the bombing a "pointless act of terror." Mary-Lou McDonald, president of Irish nationalist party Sinn Fein, said it was a "mindless and outrageous attack on (the) people of Derry."
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