11.25am: Victoria Police Superintendent Michael Frewen told media at the scene:

"What we know at this stage is that at around nine o'clock this morning a Beechcraft airplane was taking off from Essendon Airport, close to taking off from the runway, called in a mayday," he said.

"We understand that there was potentially a catastrophic engine failure, but we're unsure at this stage, going to a slight degree of altitude before crashing into the back of the DFO and Focus On Furniture.

"As soon as the MFB put out the fire we will do a structural integrity test of the building and then we will send people to ascertain those that are injured or otherwise.”

He said the area the plane hit was a storage area at the back of Focus On Furniture and JB HiFi.

"It was a private charter flight, that I can tell you."

He said there was "some debris on the freeway proper" and the freeway would be closed for some time.

Police are expected to hold another press conference shortly.

The Australian Transport Safety Bureau has asked witnesses to call 1800 020 616 to help with the investigation into the crash.

11.20am: An MFB spokeswoman said the Essendon Fields DFO-aircraft fire was brought under control about 10.30am this morning.

It took about 56 firefighters 90 minutes to bring the blaze, caused by the plane crash, under control, the MFB said.

"The fire has been brought under control and the incident has been handed over to Victoria Police."

11.07am: The mayor of King Island, Duncan McFie, has released a statement and expressed his "concern for anyone affected", The Advocate in Burnie reports.

"At this time, King Island Council has no further information and is unable to comment on this matter," he said.

11.05am: Peter Scullin had just left the Calder Freeway, on his way back to Melbourne from the country, and was driving directly underneath the plane when it hit the side of the DFO, reports The Age.

"There was a massive ball of flame – I could feel the heat even though my wife was driving and I was in the passenger seat with my window closed," said Mr Scullin.

Immediately after, Mr Scullin said "parts of the plane landed on the beginning of the road on-ramp".

"(It was) just like you see on ... in a movie, where you see these special effects. The ball of flame went 30 or 40 feet into the air. We got out to see whether the outside of the car had had any paint blistering".

Mr Scullin said that they had pulled up, amid "a burning smell that was a combination of aviation fuel and an explosion".

"And we thought 'My God, how lucky are we that we are still here?'. We both looked at each other and thought that was the closest to death we are going to come."

Mr Scullin, who is a former mayor of a Bayside Council, questioned the wisdom of having allowed the airport to expand with retail uses.

The pilot appeared to be trying to gain control of the plane when it hit the corner of the DFO.

"But it could just have easily landed in the middle of the DFO," he said. "You've got to ask questions about whether this was an accident that was always going to happen."

11am: A source on King Island said the five on board the plane were golfers due to arrive on the island this morning.

Fairfax Tasmania understands one of the plane's twin engines failed shortly after take-off.

Both of the two hire-car companies on King Island said they did not have a booking for the passengers of the crashed flight.

Scheduled flights to King Island from Tasmania and Melbourne usually arrive on the island about 8.30am.

It is a popular destination for golfers with the island’s two courses, Cape Wickham and Ocean Dunes, ranked the first and second-best public courses in the nation.

10.55am: The Age is reporting it understands two bodies have been retrieved from the plane's wreckage and emergency services are searching for three more, reports Cameron Houston.

No one on the ground is believed to have been injured in the crash, and DFO was not due to open for another hour.

The plane got to 100 feet, veered left and is understood to have put out two mayday calls before crashing.

10.48am: The plane crashed into the rear of the Homemaker Centre of DFO Essendon, the centre's management has confirmed.

It was not open at the time of the crash.

Vicinity Centres has told Patrick Hatch it is working with Essendon Fields and Victorian emergency services who are currently coordinating and managing the immediate response to this incident, and the centre is currently closed.

Police superintendent Mick Frewen said the fire was still burning so investigators had been unable to get inside to determine the damage.

The plane hit a storage area at the back of a JB Hi-Fi and a Focus on Furniture store, he told reporters.

The Tullamarine freeway was closed so investigators could preserve debris that had landed on the road.

10.40am: Chris Cowan, chief executive of Essendon Fields, which runs the airport and surrounding developments, said the airport and the DFO would be closed indefinitely.

An Ambulance Victoria spokeswoman said "we assessed some people at the scene but we haven't treated or transported anybody".

"The people that we assessed were on the ground."

She could not confirm whether that meant all passengers had died.

10.30am: The plane that crashed was hired from Bendigo-based charter company MyJet.

Five people were on board the Beechworth King Air chartered for King Island. It was being operated by Corporate and Leisure Travel, who had hired it from MyJet, Australian Corporate Jets chief Bas Nikolovski has confirmed.

Sixteen fire crews are on site battling the blaze.

The Calder and Tullamarine Freeways are closed, as is Bulla Road.

10.24am: An MFB spokeswoman was they now have 16 trucks on site fighting the fire at DFO, after the plane crash this morning, reports The Age.

She said crews were focusing their efforts on making sure the fire is extinguished and assessing any structural damage to the building.

MFB's Air Operations Unit are using drones to assist crews on the ground at DFO.

The fire is originating from behind Spotlight, which is where the plane appeared to have come down.

10.15am: 3AW’s Neil Mitchell has received a statement from Spotlight, which said its warehouse had been impacted.

All staff have been accounted for.

It has also been confirmed the five-person aircraft was a charter flight on the way to King Island.

There is no word on casualties at this stage.

10.09am: The Age is reporting the light aircraft crashed into the Spotlight and Nick Scali furniture stores.

Daniel May said he was waiting for DFO to open, when he saw the plane come down, reports Emily Woods.

"I was chatting to my friend waiting for DFO open and then see the low flying plane come in and crash behind one of the stores," he told Fairfax Media.

"There was an orange explosion, and then smoke.

"He said the plan crashed behind the JB HiFi store, believed to have been into Spotlight.

"It seems to crash the space behind those stores and near the off ramp of the highway.

"There was damage and wreckage and burning behind one of the stores, and it crashed at the back before the highway.

"Emergency crews rushed very quickly in, soon after, and I left the area."

10.06am: Government sources said the airplane was a "Beechcraft" with five passengers chartered to King Island, reports The Age.

A spokesman for the Australian Transport Safety Bureau said investigators would be attending the crash site and releasing information as it came to hand.

10am: An update on the traffic situation:

The Tullamarine Freeway is closed in both directions between English Street and Pascoe Vale Road, VicRoads has confirmed.

The Calder Freeway is closed in both directions between McNamara Avenue and Pascoe Vale Road.

Bulla Road is closed at the Tullamarine Freeway including the entry ramp to the Tullamarine Freeway inbound.

All access to the Essendon Airport is closed.

Detours inbound are in place. VicRoads says motorists should take a detour via the Western Ring Road to the West Gate Freeway.

Outbound VicRoads advises motorists to detour via Pascoe Vale Road to Buckley Street and through to Milleara Road and Keilor Park Drive, and onto the Western Ring Road.

9.55am: Three police helicopters are hovering over the area, reports Miki Perkins from near Essendon Fields DFO.

Traffic is bumper to bumper near the DFO on the Tullamarine Freeway heading north out of the city but fine heading in.

9.50am: Images on social media appear to show the plane hit the roof of the Essendon DFO shopping centre, which sits on the boundary of Essendon Airport.

Footage from the scene shows firefighters pouring water on a large hole in the centre's roof.

9.45am: The state government has confirmed the plane was a five-person charter on its way to King Island.

9.42am: An MFB spokeswoman said she was on the way to the airport.

"MFB crews are responding to an incident at DFO near Essendon Airport. Lots of smoke visible in the area. Please avoid the area."

9.38am: The Tullamarine Freeway is closed in both directions between English Street and Bell Street.

The Calder Freeway is closed in both directions between McNamara Avenue and Bell Street.

Bulla Road is closed at the Tullamarine Freeway including the entry ramp to the Tullamarine Freeway inbound.

VicRoads says delay travel through the area and seek an alternative route.

VicRoads advises motorists to exit the Tullamarine Freeway as early as possible and keep away from the area.

9.36am: Ambulance Victoria has released a statement confirming the aircraft is not an air ambulance, nor belonging to Ambulance Victoria.

9.30am: Collin Ting works at Cafe Chezzi inside the DFO food court and said he could see a lot of black smoke coming from near the airport.

"It's quite far from us, but I can see a plane has crashed near the entrance to the airport."

He said the crash was not near the DFO building, and they had not yet been evacuated.

9.29am: The plane is believed to be a King Island charter flight, with five passengers on board.

An Ambulance Victoria spokeswoman confirmed they were responding to the crash and said she was unaware of reports the aircraft was an air ambulance.

She said she had no information on injuries at this stage.

9.25am: Victoria Police has released a statement: 

Emergency services are responding to a plane crash into a building near Bulla Road in Essendon Fields.

It is believed the plane crashed just before 9am.

At this stage we do not have information regarding possible casualties and police are currently evacuating the area.

The surrounding roads will be effected for some time.

We will bring you further information as it comes to hand.

A witness to the incident told 3AW’s Neil Mitchell, "I saw a ball of flames".

"My heart's racing."

LISTEN: Neil Mitchell hears from callers who saw the plane crash at Essendon

The Calder and Tullamarine Freeways are both closed, as is Bulla Road.

9.20am: An air ambulance has reportedly crashed into shops at the DFO in Essendon.

The Tullamarine is closed in both directions.

There are reports the Calder Freeway and the Western Ring Road have both been closed.

Eight fire crews are responding to the crash.

More to come.