"At 15:54, a man driving a [Reanault] Clio auto presumably deliberately hit three people at a pedestrian crossing", Toulouse prosecutor Pierre-Yves Couilleau told BFMTV. Unconfirmed reports have claimed the driver suffered from major psychological problems.
The man was arrested immediately. There are fears of a terrorist attack.
The suspect, who has several previous drug-related convictions, has been arrested, BBC News reports.More news: Eurozone Growth Set to Accelerate as Threats Subside
The investigation is to be handled by regular judicial police rather than Paris's anti-terror unit, he said. At least three people were injured, two of them critically.
The woman's life is not in danger, police said.
As the Europe 1 television network reported, the incident happened at the exit of Lyceum-college St. Exupery.More news: Apple May Unveil Standalone AR Headset in 2019
The attack came days after China asked France to "ensure the security" of its nationals, who have been regular victims of thieves.
The Toulouse region's daily newspaper, LaDepeche, said the three students were in Blagnac for a French-Chinese program at a private business school.
Last summer, a Tunisian man used a large truck to kill 86 people in the southern French city of Nice.More news: Mysterious void between two chambers in Great Pyramid of Giza discovered