The light aircraft was making a short trip from Lynden Pindling International Airport, near capital Nassau, San Andros Airport when it "reportedly encountered difficulties" and crashed into bushes prior to landing, the country's Aircraft Accident Investigation Authority said in a statement.
The fatal crash is occurred on the day of the Bahamas' 53rd independence anniversary. BBC reported.
"Today is a day of celebration but it has become a day of mourning," Prime Minister Philip Davis told a media conference.
He added: "Once again, a chapter in our nation's story has been marked by tragedy."
Davis initially said there was one survivor, although he confirmed hours later that the person had died from their injuries.
The details of the people on board, including their age and names, have not been released.
TheCessna 402 aircraft was operated by Flamingo Air, a Bahamas-based airline. The Ministry of Aviation said it was temporarily suspending the airline's air operator certificate "as a precautionary safety measure."
The grounding measure "should not be treated as an adverse compliance action against Flamingo Air," the ministry said.
It noted there had been "two safety incidents" that had occurred on Friday.
Aviation Minister JoBeth Coleby-Davis told reporters a plane had earlier routed back to Nassau when the pilot reported an issue. A fire broke out on board once the aircraft landed and passengers had disembarked, the BBC's US partner CBS News reported.
The BBC has contacted Flamingo Air for comment.
In remarks to local media, the airline said: "At this time, the details are being gathered, and we are committed to cooperating with the relevant authorities."
