An AFP photographer at the scene saw the charred wreckage of the plane after it caught fire in a field near the Boufarik airbase, 30km south of Algiers, from where it had taken off.
Hundreds of ambulances and dozens of fire trucks with sirens wailing rushed to the scene of the crash, in an uninhabited area where one person was injured on the ground by debris.
Firefighters extinguished the blaze and security forces set up a cordon to prevent journalists and onlookers from approaching.
There was no immediate word on the cause of the crash. Deputy Defence Minister General Ahmed Gaid Salah visited the site and ordered an investigation, the defence ministry said.
The Ilyushin IL-76 transport plane was bound for Tindouf in southwest Algeria near the borders with Morocco and Western Sahara.
The Tindouf region is home to refugees from Western Sahara and houses the administrative offices of the Sahrawi Arab Democratic Republic declared in 1976 by the Algiers-backed Polisario Front which seeks independence for the region.
Rabat considers Western Sahara an integral part of Morocco and proposes autonomy for the resource-rich territory.
According to the plane manufacturer’s website, the IL-76, a four-engine plane built in the Soviet Union and then Russia, can transport between 126 and 225 passengers depending on the model and configuration.
The North African country has suffered a string of military and civilian aviation disasters but Wednesday’s was Algeria’s deadliest ever plane crash and the world’s fourth costliest in human lives in 20 years.