Chuuk Airport manager Jimmy Emilio told local news agencies that the 36 passengers and 11 crew members on board the Boeing 737-800 were all safe after the plane attempted to land this morning.
Videos posted to social media show dozens of people in boats around the wreckage.
It is believed that the Boeing 737-800 was capable of carrying upto 160 people, but BNO News reported numbers of injured or fatalities were now unclear.
The airline said the plane, which was making a scheduled stop on its way from the Micronesian capital Pohnpei to Port Moresby, had "landed short of the runway".
No serious injuries were reported among those traveling on a Boeing 737 that landed about 150 yards short of a runway off the coast of Micronesia, according to the Federal Aviation Administration.
"I thought, well, this is not like the way it's supposed to happen", he said.
"The plane crashed and in around five minutes the rescuers were there, they were ordinary people, because there are plenty of boats around the shore".
"Somebody has to look into that and let us now", Emilio told PDN.
"On a normal landing you end up 30m from the end of the runway and the end of the runway means water", he said.
Air Niugini is the national airline of Papua New Guinea and has been in operation since 1973. A cargo plane belonging to Air Niugini went off a runway at Madang Airport in 2013, but there were no casualties.