A hot air balloon crashed after catching fire in the US state of Texas on Saturday morning, killing all 16 people on board, local authorities and federal investigators said.

The Caldwell County Sheriff's Department was called at 7:44 am (1244 GMT) to an incident in a rural area west of Lockhart, 65 kilometres south of Austin, the state capital. First responders found a hot air balloon with a basket that appeared to have burned.

"The balloon was occupied, and it does not appear at this time that there were any survivors of the crash," Caldwell County Sheriff Daniel Law said in a statement provided to dpa.

National Transportation Safety Board officials were at the scene in central Texas and said they would conduct a thorough investigation of the crash.

Video from the scene showed a large power transmission line along the crash site.

The power company that owns the line said that two local circuits were down Saturday but could not confirm if the had balloon struck the line, the Statesman newspaper in Austin reported. No power outages were reported.

A nearby resident heard loud popping noises and walked onto her front porch, the Lockhart Post-Register reported.

"Then I heard another pop - it sounded like gunshots," Margaret Wylie told the paper. "And then I saw the fireball, ... and I just started praying that whoever was involved got away before that happened."

The crash site was situated approximately 450 metres from her house.

Texas Governor Greg Abbott offered prayers and condolences for the families of those killed in the "heartbreaking tragedy."

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