The Hercules C130 plane had taken off from the city of Timika before crashing near its destination of Wamena at around 6:15am local time, said Ivan Ahmad Riski Titus, operational director of Indonesia's Search and Rescue Agency.
The crash site on Lisuwa mountain had been found and the bodies of the victims were being brought back to Wamena, he said.
Air transport is commonly used in remote and mountainous Papua, Indonesia's easternmost province, where land travel is often impossible.
Indonesia has a patchy air safety record and President Joko Widodo promised a review of the country's ageing air force fleet last year after a military transport plane crashed, killing more than 100 people.
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