Video shows spectators watching on as the plane came towards them.
It then started to turn and slowly slip in the air before plummeting towards the ground.
The aircraft then fell out of sight behind some buildings as it came lower and lower.
Seconds later, a massive explosion could be seen over the tops of the structures it fell behind.
Black smoke rose into the air in a shocking plume.
Organisers of the West Coast Air Show said a fatal accident occurred involving the Impala Mark 1 aircraft.
It was piloted by highly respected South African test pilot James O’Connell.
The crash happened at the West Coast Air Show in Saldanha, a town about 70 miles north of Cape Town, on Saturday.
According to Elowayne Gouws, the director of West Coast Medical Rescue, the pilot died on impact.
It burst into flames in front of more than 2,000 spectators, abruptly ending the event.
Tragic photos on social media show the jet just hours before it crashed.
The man who took the photo posted: ‘Heartbreaking afternoon.
‘I took these photos of this Impala aircraft just hours before it tragically crashed at the West Coast Air Show.
‘My deepest condolences to the pilot’s family. May he rest in peace.’
A statement posted on social media by the organisers of the show read: ‘It is with profound sadness that the organisers of the West Coast Airshow confirm a fatal accident involving James O’Connell, a highly skilled and respected test pilot from South Africa.
‘Mr O’Connell was performing a routine display intended to demonstrate the capabilities of the Impala Mark 1 – a beloved warbird with deep historical significance for many South Africans.
‘It was especially a huge moment because the Impala has not been seen performing at air shows for many years.
‘The manoeuvres were being executed as part of the official air show programme, witnessed by thousands of spectators.
‘Eyewitness accounts report that the aircraft appeared to be under control during most of the display.
‘However, during one of the final manoeuvres, the aircraft experienced a sudden loss of altitude and entered a steep dive before making contact with the ground.
‘Our thoughts and deepest sympathies are with James’s family, loved ones, and everyone affected by this very tragic event.’
Gouws, the director of West Coast Medical Rescue, told News 24 that medics arrived at the scene within two minutes ‘and found the wreckage engulfed in flames’.