A charter planed headed for King Island crashed into a building at the Direct Factory Outlet precinct in Essendon early this morning, killing five people. Premier Daniel Andrews said it is the worst civil aviation accident in Victoria for 30 years.

The Homemaker Centre at DFO, where the plane hit, was not open at the time and no-one on the ground was injured.

The crash occurred at around 9am, after the plane flew to about 30 metres, veered left and then crashed. Victoria Police Superintendent Michael Frewin said the crash was a result of "potentially catastrophic engine failure".

Eyewitnesses told 3AW there "were constant explosions going off,” and “a gaping hole in the building and flames licking up the side...” The plane hit a storage area at the back of Focus On Furniture and JB HIFI, and a carpark.

Portions of the Calder and Tullamarine Freeways remain closed due to the accident. The Tullamarine Freeway/CityLink is closed inbound between the M80 Ring Road and Moreland Road but all outbound lanes are now open after earlier closures. Emergency Management Commissioner Craig Lapsley said the inbound lanes will remain closed for hours as police collect evidence and make sure the road is safe for when traffic resumes.

Photos on social media show black smoke billowing from the crash site. Smoke could be seen from as far away as Docklands and Preston.

This story is being updated on a rolling basis as updates come in.