The plane's pilot reported technical problems shortly before slamming into the office block, the tallest in Milan, transport officials said.
The Interior Ministry said it was probably an accident, scotching initial fears that the crash was a repeat of the Sept. 11 attacks on the United States.
"The first information we have points to an accident," Interior Minister Claudio Scajola told reporters.
"We have news of three dead and dozens and dozens of injured," said Pier Gianni Prosperini, the deputy head of Milan's regional government.
"We heard the sound of propellers as if from a small aircraft and then there was a huge bang. Everything was flying through the air, paper, furniture," a female office worker, who declined to give her name, said.
The high-rise building, which dominates the skyline of Italy's financial capital, was torn open across at least two stories. It houses local government offices, and towers above the city's central train station.
An official at the local air transport office said the pilot, who was believed to have taken off from Switzerland, had reported problems with his plane's undercarriage as he approached Milan in bright, late afternoon sunshine.
CIRCLING CITY
Air traffic controllers lost contact with the pilot as he was circling the city ahead of trying to land at around 5:45 p.m. (1545 GMT).
Immediately after the incident, the president of the upper house of parliament said the building was "very probably" the target of a terror attack, but soon afterwards his spokesman said it was probably just an accident.
The skyscraper, which stands 400 feet tall, is known as the Pirelli high-rise, but the Italian tire and cable company no longer operates from it.
"I heard a strange bang so I went to the windows and outside I saw the windows of the Pirelli building blown out and then I saw smoke coming from them," said Gianluca Liberto, an engineer who was working in the area.
Since the Sept. 11 hijacked airliner attacks on New York's World Trade Center and in Washington, Italy has been at the forefront of the U.S.-led war on terrorism in Europe.
In October, U.S. officials said they believed Milan's Islamic Cultural Institute was al Qaeda's main European base. Muslim leaders in Italy have denied that charge.
Italy has arrested around 30 people on suspicion of links to extremist Islamic groups since September 11 and has frozen around ($300 million) of suspected assets.
Milan's stock exchange suspended share trading after the incident.
Well, I guess that closes the matter.
On a different topic, do you have any interest in buying some extremely valuable swamp land in Florida?