An Indonesian military plane has crashed in a residential area in the capital of North Sumatra with 113 people on board, according to Indonesian Air Force officials.

Rescue teams worked through the night to recover bodies from the wreckage of the plane, which was bound for Tanjung Pinang, on an Indonesian island near Singapore, but crashed in Medan shortly after take-off.

Indonesian air force chief of staff Agus Supriatna said 72 bodies had so far been recovered, 23 of which had been identified.

He said there was no way anybody could have survived the crash.

It is unclear whether the victims were military or civilian, but Major General Fuad Basya indicated family members of military personnel were among those on board.

He said the transport planes were often used to move military personnel and their families from one base to another.

Mr Supriatna said the 50-year-old C-130 Hercules had 12 crew and another 101 passengers on board when it took off from Soewondo Air Base shortly before noon (local time) on Tuesday.

A propeller from an Indonesian military C130 Hercules transport plane rests on the roof of a building. ( Reuters: Roni Bintang )

Minutes into the flight, the pilot requested permission to return to the base.

The plane then banked to the right and plummeted into the ground, bursting into flames and wiping out buildings, including part of a hotel.

Major General Basya told the ABC the cause of the crash was yet unknown.

He said the plane did not have a black box flight recorder which would make investigations into the crash difficult.

Nearly 10 years ago dozens of people on the ground were also killed when a commercial jet crashed in the same street.