According to BBC News nothing is known so far about the motivation behind the attack, in which 113 people are said to have been hurt.
However, authorities described it as an "organised, premeditated, violent terrorist attack".
Five suspects were shot dead but their identities have not been confirmed, Xinhua said.
Witnesses said that the men attacked people at random.
"I saw a person come straight at me with a long knife and I ran away with everyone," he said.
He added that those too slow to flee were cut down.
Some who escaped were desperately looking for missing loved ones.
Yang Ziqing told Xinhua she and her husband had been waiting for a train to Shanghai "when a knife-wielding man suddenly came at them".
"I can't find my husband, and his phone went unanswered," she said.
Social media users in China posted pictures of the attack on the internet, but correspondents say they are being taken down.
Images seen by the BBC show men and women lying on the floor in pools of blood following the attack.
State broadcaster CCTV said top security official Meng Jianzhu would travel to Kunming to oversee the handling of the investigation.
President Xi Jinping and Premier Li Keqiang have sent condolences to the victims and their families, the channel added.
Source: BBC News
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