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

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, Police Minister Lisa Neville said.

A witness who gave his name as Jason told Australian Broadcasting Corporation that the plane came in "really low and fast" before it exploded into "a massive fireball" on impact.

"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.

The US Embassy in Canberra confirmed that four victims were American citizens.

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

Mr De Haven's sister Denelle Wicht posted on Facebook that her 70-year-old brother had been killed "on a once in a lifetime trip to Australia" with friends.

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

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

"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," Mr Leane said. The plane was a charter flight to King Island in Bass Strait between the Australian mainland and the southern island state of Tasmania. It is believed to have come down shortly after take-off.

Several images of the crash appeared on social media, where there was incorrect speculation that the aircraft was an air ambulance.

Essendon Airport is a small airfield used mainly by light planes. A spokeswoman for Airservice Australia said flights in and out of Melbourne’s main airport were not affected.