BLANTYRE, Malawi, June 11 (Reuters) - Malawi's Vice President Saulos Klaus Chilima and nine others, including former first lady Shanil Dzimbiri, were killed when the military plane they were travelling in crashed, President Lazarus Chakwera said on Tuesday.

The aircraft carrying Chilima, who was seen as a potential candidate in next year's presidential election, went missing on Monday.

"I'm deeply saddened, I'm sorry to inform you all that it has turned out to be a terrible tragedy. The search and rescue team has found the aircraft near a hill. They have found it completely destroyed with no survivors," Chakwera said in an address to the nation.

The plane left the capital Lilongwe at 09:17 a.m. (0717 GMT) on Monday but was unable to land at Mzuzu airport as scheduled at 10:02 a.m. due to poor visibility.

It was ordered to return to Lilongwe but went off the radar and aviation authorities could not make contact with it.

Chakwera said all passengers on board were killed on impact and that the military was bringing their remains back to the capital.

"Despite the track record of the aircraft and the experience of the crew, something terrible went wrong with that aircraft on its flight back to Lilongwe, sending it crashing down and leaving us all devastated," he said.

Images shared online showed security and rescue personnel on the crash site on a hillside with debris scattered around the tail of the Dornier 228-202K military transport plane, its tail number MAF T03 still visible.

Reuters has not been able to authenticate the pictures.

Chilima, 51, returned from South Korea on Sunday after participating in the Korea-Africa summit, and was travelling with the other passengers on Monday morning to attend the funeral of Malawi's former justice minister in the north of the country.

"Dr. Saulos Klaus Chilima was a good man, a devoted father and husband, a patriotic citizen who served his country with distinction, and a formidable vice president," Chakwera said.

Chilima, a former director of Airtel Malawi (AIRTEL.MV), was the leader of the United Transformation Movement party. He partnered with Chakwera to form the ruling Tonse Alliance and ran as his running mate in their 2020 victory.

Relations between the two, however, had become tense ahead of the 2025 presidential election in which the vice president was expected to challenge the president.

Chilima was arrested in 2022 over graft allegations. However, a court dropped the charges against him last month after the director of public prosecutions filed a notice for the case to be discontinued. Chilima denied wrongdoing.