Several others, including children, are believed to have been injured in the incident which took place outside Ozar Hatorah school, a private Jewish school to the north east of the city.
The three dead are reported to be a teacher and two children who were all gunned down at around 8.10am, when just ahead of the start of classes in most schools.
French prosecutor Michel Valet said there were 'several dead' following the shooting.
Parent Patrick Rouimi told Toulouse newspaper, La Depeche, that the gunman targeted people at an informal pick up point for the school.
The daughter of one of the school's directors, Charles Ben Goulding, was also believed to be among the injured.
Pierre-Henri Brandet, spokesman for the French Interior Ministry said: 'Prefectures throughout France, particularly in the Southwest, should strengthen surveillance and vigilance around places of Jewish education.'
Sources say the gunman was wearing a helmet and fled the scene on a black scooter, echoing scenes from last week when three people were killed and a fourth injured.
President Nicolas Sarkozy and interior minister Claude Gueant are expected to visit the scene later today.
The incident comes a week after shootings in Toulouse and Montauban in which three people were killed and a fourth injured.
On every occasion - including this morning's attack - the gunman was wearing a crash helmet with the visor pulled down, and he was brandishing two guns. Read More