A Qantas flight has been forced to divert after its engine caught fire during a flight from Queenstown to Sydney.

Locals on the ground reported hearing explosions as the plane took off from Queenstown on Saturday afternoon, with witnesses describing how loud it was.

“It did like maybe six or seven flame bursts and loud bangs,” one witness said.

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Witnesses described hearing explosions and seeing flames burst from a Qantas plane as it took off from Queenstown. Credit: 7NEWS

“It really echoed around the valley, so it was very loud. Everyone ran out onto their balconies and went to go look at it.”

The flight was able to land safely in Christchurch without further incident.

An investigation has been launched into the cause of the engine fire.

Qantas said the passengers would be given accommodation and re-booked onto flights to Sydney.