The incident on Wednesday evening injured another 44 people, according to officials from Hengdong city in central Hunan province.
Videos and photos circulated on social media purportedly show large crowds of up to several hundred people running frantically from the square in different directions, amid bodies laying scattered on the ground.
The government originally said three people died, but raised the death toll in subsequent statements.
The driver, surnamed Yang but whose sex the government did not provide, drove the auto alone onto the square, then attacked people using a spade and a knife, the statement added.
Nine people have been confirmed dead and 46 others injured by the government as of writing.More news: Neymar Scores on a Penalty Kick as Brazil Dominates the U.S.
The driver was identified by police as 54-year-old Yang Zanyun.
Local government officials said the the driver had a criminal record and he was detained at the scene.
The suspect is thought to have served several prison sentences for convictions including arson, drug trafficking and assault. In 2013, an SUV plowed through a crowd in front of Beijing's Forbidden City before crashing and catching fire, killing five, including the vehicle's three occupants.
"He drove the auto by himself into the crowd at Yujiang Square that night and had with him shovels and daggers to attack the crowd, intending to cause serious damage", a Thursday police statement said.
That appeared to rule out terrorism, although vehicles have previously been used in attacks blamed on militant Muslim separatists from the Uighur ethnic minority group.