The Associated Airlines charter flight took off at roughly 9:30 am (0830 GMT) from the domestic terminal at Lagos' Murtala Mohammed International Airport.
"It was going to Akure (in the southwest). The engine failed on takeoff and it crash-landed and burst into flames," said Supo Atobatele, spokesman for the Nigerian Airspace Management Agency.
Ibrahim Farinloye of the National Emergency Management Agency (NEMA) told AFP that "eight bodies" had been recovered so far, with another person being treated for serious injuries.
Another NEMA spokesman, Manzo Ezekiel, told AFP that the plane crashed in an area within the airport complex where fuel is stored.
The area lies between the international and domestic terminal, he added, but it was yet unclear if the fuel caught fire.
Atobatele had earlier said the plane crashed on the runway.
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