Five people have been killed in a fiery light plane crash at Caboolture airfield, north of Brisbane.

The Cessna 206 had just taken off with skydivers when it crashed and burst into flames about 11:30am (AEST) on Saturday.

On board was the pilot, two instructors and two customers who had been due to dive from 14,000 feet onto the beach at Bribie Island.

Fire officers extinguished the blaze but all five on board died at the scene.

Two investigators from the Australian Transport Safety Bureau (ATSB) will investigate the crash.

Caboolture airfield safety officer Bryan Carpenter, who witnessed the incident, said the plane had just taken off.

"The aircraft was a Cessna 206. It's used for skydiving here at Caboolture and it had just departed the runway six," he said.

"[I'm] not sure why it turned off heading to the left and it was [at a] very low level and impacted with the ground and immediately caught on fire. There were no survivors."

Other witnesses said they heard a loud bang when the plane was in the air and again when it hit the ground.

Flames and smoke at the scene of the light plane crash at Caboolture airfield, north of Brisbane on March 22, 2014. ( Supplied: Craig McKinlay )

Mr Carpenter, who runs the Aero Dynamic Flight Academy, said he did not want to speculate about the cause of the crash.

"I couldn't tell until the ATSB investigate this and they will," he said.

"We don't know what happened and why it occurred. There could have been mechanical failure - I'm suspecting that's what it is."

John Dawson from the Caboolture Aero club says the aircraft appeared to veer left just after takeoff and then crashed.

"The aircraft was taking off on a parachute run to drop parachutes on the beach at Bribie Island," he said.

"Something happened in the aircraft. The pilot decided to turn back and didn't make it."

It is the second parachuting tragedy involving a Cessna 206 in south-east Queensland in eight years.

In 2006, five people died when their plane crashed into a dam near Ipswich.

Police said the airport will remain closed today and most of tomorrow as investigators assess the crash site.

Acting Prime Minister Warren Truss has extended his sympathies to the families of the deceased.

"They've obviously taken part in recreational activity that they enjoy but it's sad that it's resulted in this accident," he said.