Images shared on social media showed the plane – on which someone is strapped to the top of a plane with a safety harness and cable – partially submerged in Poole Harbor after diving into the water for the Bournemouth Air Festival.
Dorset Police said the pilot and crew member were rescued with only minor injuries, which were treated by paramedics.
The force said an investigation was underway and asked members of the public to avoid the area.
The festival, which was on its third day, has been suspended.
Officials are trying to find the plane’s black box to establish what happened, according to local media, although it was previously alleged that there was a problem with the plane’s engine.
A witness told the Dorset and direct informational website that he “narrowly avoided many boats and the Haven Hotel” which he dived in the water in the Sandbanks area of Poole.
“Went down right in front of us,” a man named Alex wrote on Twitter, alongside a dramatic image of the sinking plane.
Another said: ‘The plane has just crashed into the Bournemouth Air stand. Pilot and wing walker unharmed. The plane landed at sea and sank very quickly. Good news, everyone is safe.
The official Bournemouth Air Festival Twitter page posted a photo of the Dorst coast, with the update that all flights to the event had been suspended for the remainder of Saturday.
“We intend to re-establish a poster program for tomorrow,” he added.
A police statement said: “We received a report at 3:50 pm on Saturday September 4, 2021 that a small plane had crashed into the water in the Sandbanks area of Poole Harbor. Help is on site.
“The plane was part of the Bournemouth Air Festival flight program with two people on board. The two occupants were rescued and reportedly suffered minor injuries. They are taken care of by the ambulance service.
Meanwhile, a spokesperson for the HM Coast Guard added in a statement that two RNLI Poole lifeboats had been deployed to assist in the operation.
“Two people were rescued from the water and placed in the care of the ambulance service, although it is believed they were not injured,” the spokesperson said.
The organizers hope to be able to resume the festival’s poster program tomorrow.
“The festival site remains open and all activities on the ground [will] keep going… and the fireworks, ”the organizers reminded participants in a tweet.