Footage showed a large area of fire and smoldering debris in an area filled with homes.
Police and fire departments arrived at the scene.
According to tracking website Flightradar24, the plane departed Cascavel at 11:56 local time (14:56 GMT). The last signal received from the aircraft was about an hour and a half later.
Brazil's Civil Aviation Authority said the plane, built in 2010, was “in good operating condition with a valid registration and airworthiness certificate.”
He added that all four crew members on board at the time of the accident were fully licensed and had valid qualifications.
The Uopécan Cancer Hospital in Cascavel told BBC Brazil that two of its residents were among the passengers who died.
The moment the plane crashed was witnessed by local residents.
“When I heard the plane crash, I looked out the window at home and saw the plane crash,” Felipe Magalhaes told Reuters, adding that the sight was “terrifying.”
Another resident, Natalie Sicari, told CNN Brazil that while she was having lunch she heard a “very loud noise very close to her”, which sounded like a drone but was “much louder.”
“I went out onto the balcony and saw the plane spinning. Within seconds, I realized that this was not the normal movement of an airplane.”
The accident is Brazil's worst air crash since a TAM Express plane crashed and burst into flames at Sao Paulo's Congonhas Airport in 2007, killing 199 people.
President Lula paid tribute to the victims during a speech at the event.
He told the audience, “I have some very bad news to share. I would like everyone to stand and observe a moment of silence.”
He posted on social media that he was “deeply saddened” by the crash. “My deepest sympathies go out to the families and friends of the victims,” he said.
The nearby city of Balinese said 20 emergency personnel had been dispatched to the crash site as part of a joint operation.
“Bali News City Hall said in a statement that “20 personnel were mobilized, including three vehicles from the Bali News City Civil Guard and one vehicle from the Civil Defense Force.”
ATR said in a statement that it had been notified of an incident involving an ATR 72-500.
“Our first thoughts are with all individuals affected by this incident,” he said.
“ATR experts are dedicated to supporting both investigations and our customers.”
