The aerobatic display aircraft lost control while performing a manoeuvre and crashed into the tarmac just after 5pm.
Vision from the scene shows the aircraft slamming into the ground.
The pilot suffered serious upper and lower body injuries and has been taken to hospital in a serious but stable condition.
The pilot was the sole occupant of the aircraft when it crashed, police said.
“The incident occurred a significant distance away from spectators and there have been no reports of further injuries,” a police spokesperson said.
Gasps could be heard from the crowd of thousands as the plane hit the ground.
The airshow has been suspended for the remainder of the day as emergency services respond to the incident.
Airshow organisers said they planned to move forward with the show schedule tomorrow morning.
“We are continuing with preparations to recommence the airshow tomorrow morning, subject to confirmation this evening,” AMDA Foundation chief executive Justin Giddings said.
“Our thoughts are with the pilot and his family, friends and team members.”
Public transport may take some time to arrive given the unexpected early finish, a transport department spokesperson said.
“We ask event patrons to remain patient as tens of thousands try to leave at the same time,” the spokesperson said.
“It will take considerable time for everyone to depart the event site, unfortunately, delays are unavoidable.”
The Australian Transport Safety Bureau (ATSB) has commenced an investigation and is appealing for any witnesses with video footage to make contact via its witness form
“The ATSB is deploying a team of transport safety investigators from its Canberra office, specialising in aircraft operations and maintenance,” a spokesperson said.
“Investigators will conduct a range of evidence-gathering activities, including site and wreckage examination, and recovery of any aircraft components for further examination at the ATSB’s technical facilities in Canberra.
“Investigators will also seek to interview any involved parties, and collect relevant recorded information including available flight tracking data, as well as pilot and aircraft maintenance records, and weather information.”
The six-day event is the largest international airshow and aerospace and defence exposition in the Southern Hemisphere.
Gates opened to the public just hours ago, after several trade days earlier in the week.
The Airshow was due to come to a close on Sunday evening.
