One person was confirmed killed and seven others were injured when a light plane crashed in Sydney's south-west area just after 8am Tuesday, the New South Wales Ambulance Service confirmed. Earlier, the NSW, said two people had been killed, but later revised the figure to just one.

A spokesman for the service that a 57-year-old man, a 50-year-old woman and five children were rushed to hospital due to shock, when the plane crashed into two power poles and caught fire on Canley Vale Road at Canley Vale.

Traffic reporter Jason Bowman told Macquarie Radio that he was in the air when he heard the pilot issued a distress call before he attempted to make an emergency landing.

"He had taken off from Bankstown, was heading out towards Richmond/Windsor, had an emergency going on in the aircraft and asked to be able to come into land," Bowman said.

"They closed Bankstown Airport, he made a turn-around ... he's tried to make his way back (and) unfortunately he hasn't been able to get high enough because of the problem that he had with the aircraft and has crashed," he added.

The police immediately closed the nearby Canley Vale Public School and evacuated students there.

A witness, Kevin Huynh said he was lying in his bed when he heard a powerful explosion. He told investigators that when he got up, he saw the front gate of his home on fire and the electric pole was damage.

''I could see the flames were coming close to my home and I did not stay round long to see what could happen. 'I got out of the house and jumped over the fence into the school next door and I could hear people who were working in the school calling out."