Police said the 69-year-old pilot took three passengers on a recreational flight, as the plane crashed in north-eastern Brisbane shortly after take-off.
Pictures showed the plane floating upside down in Moreton Bay, Reuters reported.
Police are still working to identify the passenger and the two children, who Officer Craig White said were “under their teenage years”.
Australian Transport Safety Board Commissioner Angus Mitchell said a report on the likely cause of the crash would be completed within six to eight weeks.
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