Ships and planes have been scrambled to search for the plane, which was flying over the Andaman Sea when it went missing.
"Communication was lost suddenly at about 1:35 pm (07:05 GMT) when it reached about 20 miles west of Dawei town," the commander-in-chief's office said in a statement.
Ships and planes have been scrambled to search for the plane, which was flying over the Andaman Sea when it went missing, the statement added.
An airport source said the plane was carrying 105 pasengers and 11 crew when it took off.
The passengers were believed to mainly be family members of military men based in the coastal region.
"We think it was a technical failure. Weather is fine there," the source told AFP, asking not to be named, adding there was no news of the plane so far.