The cause of the crash was unclear, and an investigation has been opened, according to a Defense Ministry statement.
Emergency services converged on the area near the Boufarik military base after the crash.
“There are more than 100 deaths. We can’t say exact how many at this point,” Mohammed Achour, chief spokesman for the civil protection agency, told The Associated Press.
He said the plane was carrying soldiers.
The Defense Ministry did not provide a death toll but expressed condolences to the victims’ families. The flight had just taken off from Boufarik, about 30 kilometres southwest of the capital Algiers, for a military base in Bechar in southwest Algeria, Achour said.
It was scheduled to make a layover in Tindouf in southern Algeria, home to many refugees from the neighbouring Western Sahara, a disputed territory annexed by Morocco.
The Soviet-designed Il-76 military transport plane crashed in an agricultural zone with no residents, Achour said.