Air Niugini General Manager Marketing Dominic Kaumu confirmed with Loop PNG.
Mr Kaumu said the passengers are currently being rescued by locals.
The plane was scheduled to stop in Chuuk on its way from Pohnpei to Port Moresby.
According to Air Niugini media personnel, the management is currently in a crisis meeting.
Meantime, locals in Chuuk who witnessed the accident have been posting pictures and videos on Facebook.
The pictures show rescuers responding to the crash, to help passengers and crew members to shore.