The AN32 aircraft had lost contact with the control tower at around 6.35 am. Later it was found to have crashed at Hokandara, a Colombo suburb, Airforce spokesman Gihan Seneviratne said.
Police said two persons were killed as many suffered injuries and were hospitalised.
The pilot was flying between Ratmalana airbase and the airforce base at Katunayake near Colombo international airport.