A passenger plane has crashed on the outskirts of Iran's capital Tehran, killing at least 39 people and injuring nine others, government officials and state media.

IRNA news agency said the Sepahan Airlines plane, bound for Iran's eastern city of Tabas, crashed shortly after takeoff from Mehrabad airport on Sunday morning.

A total of 48 people, 40 passengers and eight crew members, were on board when the plane crashed in the residential area of Azadi town, just five km to the west of Tehran, IRINN state TV said.

State media had reported earlier that all 48 people on board had died.

Failure in one of the plane's engines caused the plane to crash on the northern side of the Tehran-Karaj highway, semi-official Fars news agency quoted Mohammad Ilkhani, the head of Iran Airports Company, as saying.

The plane crashed into the Azad residential block on Mina 6 Boulevard, state news agency IRNA reported. State television said at least three people in the area were taken to hospital with burns.

The Antonov-140 type plane crashed at 9:18am (04:48 GMT). IRNA's English website had earlier reported it was a Taban Airline jet.

Mehrabad is located in a western suburb of Tehran and mainly functions as a domestic airport.

A local resident, Hosseine, who witnessed the catastrophe said the rear end of the airplane fell onto the central street after the plan lost control.

"I saw the airplane falling down gradually and then began to wobble until it lost control. The rear end of the plane, which is separated from the fuselage, fell onto the middle of the street. Fortunately, there wasn't much traffic nor many people on the street," the witness said.