"At around 1:10pm (8:40am GMT) a plane crashed in Deh Yak district of Ghazni province. The plane is on fire and the villagers are trying to put it out. We still don't know if it is a military or commercial plane," Aref Noori, Ghazni's governor's spokesman, told AFP.
A police spokesman in the province also confirmed the crash but was also unable to identify the craft.
Large swathes of the rural areas in Ghazni province are controlled or under the influence of Taliban militants making access to the area difficult for officials.
Social media was rife with suggestions that the plane was from the state-owned Ariana Afghan Airlines - however the company said the rumours were "not true".
"All the flights of Ariana Afghan Airlines have been completed normally," a statement on the carrier's verified Facebook page read.
Read more: Aviation disasters that have rocked the Middle East
Crashes involving military flights, particularly helicopters, are common in Afghanistan where inclement weather and creaky aircraft are often pressed to their limits in the war-torn country where insurgents have been known to target helicopters.
The last civilian flight to crash was in May 2010, when an ageing Pamir Airways plane went down in bad weather during a scheduled flight to Kabul from the northern province of Kunduz.
It was carrying six crew and 38 passengers when it crashed into a mountainside 20 kilometres (12 miles) from Kabul.
Monday's crash came just weeks after a Iran admitted it shot down a passenger plane "unintentionally" while on high alert after firing missiles at US troops stationed in Iraq in retaliation for the killing of top Iranian commander Qasem Soleimani.
All 176 passengers and crew members onboard were killed in the devastating incident that triggered protests in Iran.