Emergency crews responded to reports two planes had collided before midday on Saturday in the vicinity of Belimbla Park near Oakdale in Sydney's southwest.
The first aircraft, a Cessna 182, burst into flames on impact with the ground while a second Jabiru plane was found a kilometre north of the initial wreckage.
The Cessna was believed to have been travelling from Cessnock to Wollongong, with two people on board who police could not identify.Â
The planes came down in scrub near Belimbla Park. (Supplied/AAP PHOTOS)
The second plane was carrying one man who died at the scene.
Australian Transport Safety Bureau Chief Commissioner Angus Mitchell said it was too early to tell what caused the crash.
"It will take my team a number of days to try and sort through what's on the ground," he said on Sunday.
"One of the planes has been impacted quite heavily by a fire after the collision as well, so that makes it challenging."
Mr Mitchell said both planes were registered and could not confirm earlier reports that the Jabiru had been involved in a crash a few years earlier.
The mid-air collision was believed to have occurred in uncontrolled airspace.
"There is a landing field here, and there are some very strict and well-established protocols for planes to establish separation, but essentially, they're doing that separation themselves," Mr Mitchell said.
Police believe the Jabiru had taken off from the nearby Oaks Airfield.
NSW Ambulance Inspector Joseph Ibrahim said 10 ambulance resources including a helicopter were deployed to the "confronting" scene but nothing could be done.
"The nature of the injuries were unsurvivable," he said.
The sites, covered by bushland, are near two flying schools - Sydney Recreational Flying Club and Dave's Flying School.
Authorities urged the public to stay away as forensics and police rescue vehicles moved around the area.
They have asked any witnesses or anyone with footage of the planes in any phase of their flights to contact them.
In a separate incident, two people suffered minor injuries on Saturday after a seaplane carrying five people crashed off the coast of Hamilton Island in Queensland's Whitsundays.
The occupants were picked up by tour boat operator the Ocean Explorer and taken to shore.
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