The explosion near Aschaffenburg in Bavaria threw the one-tonne vehicle that was drilling into the asphalt into the air and killed the driver on the spot, a police spokesman said.
Seven passing cars were damaged by the force of the blast, which ripped a hole eight metres wide and 2.5 metres deep in the road.
Pieces of metal lay scattered hundreds of metres from the scene.
The police said four road workers and a motorist were suffering from severe shock.
The busy A3 highway, which links Wuerzburg to Frankfurt, was closed, causing major traffic jams in the area.
The police said explosives experts were examining pieces of shrapnel to determine what kind of bomb it was.
Unexploded bombs that were dropped on to Germany during World War II are still frequently uncovered, mostly in and around big cities.
In 2004, a bomb was exposed during road works near the main station in the eastern city of Leipzig and earlier this month 26,000 people were evacuated in Hannover, in the north, while three massive bombs were dismantled.