Information Minister Khaled Naciri told The Associated Press that the military believes 78 were killed but that searches are ongoing for all the bodies.
The MAP news agency said all three survivors were seriously injured. It said the plane was carrying 60 members of the military, 12 civilians and nine crew members.
Citing a Royal Armed Forces statement, the report said that the remains of only 42 people have been found so far. It was not immediately clear how the military determined that 78 were killed.
MAP said the plane crashed around 9 a.m. local time (0800 GMT) 10 kilometers (six miles) northeast of Guelmim in southern Morocco, as it prepared to land at the Guelmim military air base.
MAP said the crash was "due to bad weather conditions," without elaborating.
Naciri said the plane was en route from Dakhla, in the disputed Western Sahara, to Kinitra in northern Morocco, and making a stop in Guelmim.
Officials at the military hospital in Guelmim could not be reached.
Guelmim is more than 600 kilometers (360 miles) southwest of the capital Rabat, just north of the Western Sahara and a few dozen kilometers from the Atlantic Coast.
Morocco took over the mineral-rich Western Sahara, a former Spanish colony, in 1979. The Saharawi people want to establish the region as an independent state.
U.N. peacekeepers have been there since 1991, and the U.N. has demanded a referendum but Morocco has instead proposed wide-ranging autonomy for estimated half a million people who live in Western Sahara's sparsely populated desert flatland.
The Guelmim region features contrasting desert, oasis and mountain landscapes with their valleys and gorges, part of the so-called Anti-Atlas, an extension of the Atlas mountain chain that runs through Morocco. The region also features a coastal zone known as the "White Beaches of Guelmim" with the beach in nearby Tan Tan.