An Australian pilot and four American tourists on a golfing vacation were killed when a light plane crashed in flames into a shopping mall on Tuesday, shortly after takeoff in the Australian city of Melbourne, officials said.

The five were on a twin-engine Beechcraft Super King Air that crashed about 45 minutes before the Direct Factory Outlet mall in suburban Essendon was to open, Minister for Police Lisa Neville said.

The US embassy in Canberra confirmed that four victims were US citizens.

The pilot was Max Quartermain, owner of the charter company Corporate and Leisure Travel.

Greg Reynolds De Haven and Russell Munsch have been identified by their families on social media as two of the victims.

"We extend our deepest condolences to the families and loved ones of all those who died in today's tragic crash," an embassy statement said.

Police Assistant Commissioner Stephen Leane said no one outside the plane was injured.

The plane had taken off from Melbourne's second-largest airport at Essendon on a chartered flight to King Island, 255km to the south, officials said.

The mall adjoins the airport.

'Massive fireball'

Police and paramedics rushed to the crash site, where firefighters doused the flames.

"Looking at the fireball, it is incredibly lucky that no one was at the back of those stores or in the car park of the stores, that no one was even hurt," Leane said.

A pilot reported a "catastrophic engine failure" moments before the plane crashed into a storage area at the rear of the mall, police said.

A witness who gave his name as Jason told Australian Broadcasting Corporation that he was passing the mall in a taxi when the plane crashed.

"I saw this plane coming in really low and fast. I couldn't see the impact, but when it hit the building, there was a massive fireball," 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," he said.