The aircraft is an Ilyushin II-76, which is capable of carrying around 120 passengers, according to the source, who did not want to be named.
An Algerian military source told local news broadcaster Al-Hadath that there are no survivors.
Images posted on an Algerian website showed thick smoke billowing from the site of the crash, as several rescuers rushed to help.
Footage captured by witnesses shows a huge plume of black smoke billowing from an area near the runway.
As many as 14 ambulances and ten fire engines were dispatched to the horror blaze and dozens of bodies were pulled from the wreckage, according to local reports.
The Algerie Presse service agency said the Iliouchine-type plane was headed for Bechar in south-western Algeria.
On February 11, 2014, a military transport plane carrying members of the Algerian armed forces and their relatives had crashed into a mountain killing 77 people.