Five people have been killed after a small plane crashed into a shopping centre near an airport north of Melbourne, Australia.

Video showed smoke billowing from the mall near Essendon Airport, with firefighters hosing down the burning wreckage of the aircraft and nearby buildings.

Victoria state police minister Lisa Neville said five people were on board the Beechcraft plane, which was a charter flight to King Island in Bass Strait between the mainland and Tasmania.

She said: "It appears to be a very, very tragic accident that's occurred out here."

Assistant police commissioner Stephen Leane said the aircraft exploded on impact with the buildings.

He said: "There were five people on the aeroplane and it looks like nobody's survived the crash."

State premier Daniel Andrews confirmed there had been fatalities.

He said: "A number of people have died as a result of what is the worst civil aviation accident that our state has seen for 30 years."

A taxi driver told ABC radio there was a "massive fireball" after the impact.

He said: "I could feel the heat through the window of the taxi, and then a wheel - it looked like a plane wheel - bounced on the road and hit the front of the taxi as we were driving along."

Police said the aircraft crashed just before 9am local time, an hour before the Direct Factory Outlet shopping mall was due to open.

In a statement, Victoria state police said: "At this stage we do not have information regarding possible casualties."

Superintendent Mick Frewen said investigations were centred around a "catastrophic engine failure".

The pilot did make a distress call before crashing, he added.

Essendon Airport is a small field used mainly by light aircraft. Flights from Melbourne's main airport have not been affected by the crash. (Sky News)