The MV-22B Osprey came down on its way to the remote Tiwi islands north of Darwin. Five of the marines are said to be in serious condition.
They were taking part in Predators Run, involving 2,500 troops from the US, Australia, the Philippines, East Timor and Indonesia.
Only US personnel were on board the aircraft, BBC reported.
The incident took place on Melville Island north of the Northern Territory capital Darwin on Sunday.
Australian Prime Minister Anthony Albanese described the incident as tragic and said every assistance would be given to the injured.
"Five marines have been returned to Darwin for treatment with the remaining being triaged at the scene," said local police commissioner Michael Murphy.
"Additional police and defence personnel have been deployed to Melville Island to support operations, triage injured people and return them to Darwin and also maintain the crash scene while investigations continue."
MNA/PR
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