Dismembered and burned body parts, fuselage fragments and engine parts were strewn over an area the size of a football field near the village of Lissa, about 30km north of Lagos.
"The Federal Government announces with regret the unfortunate air crash of Bellview Airlines ... which resulted in the loss of life of all passengers and crew on board," a government statement released late on Sunday said.
A senior police official at the scene said: "The aircraft has crashed and it is a total loss. We can't even see a whole human body."
Bellview Airlines Flight 210 left Lagos at 8.45pm (1945 GMT) on Saturday on a scheduled flight to the capital, Abuja, and lost contact minutes later during a heavy electrical storm.
There was confusion and delay
in finding the crash site
The pilot made a distress call after take-off, indicating the plane had a technical problem, a source at the presidency said.
The plane crashed not long after, leaving a smoking 20m crater in the marshy earth, uprooted trees and blew the roofs off nearby houses.
Diplomats probably killed
A wig, human intestines, clothes, foam seats and a hand were wedged in the sodden earth. A cheque for 948,000 naira ($7300) from the evangelical Deeper Life church was one of a number of personal papers found in the smouldering wreckage.
The plane was carrying 111 passengers and six crew, the Federal Airport Authority said.
A US military officer was among
the passengers killed in the crash
A US official confirmed that a US military officer was aboard the aircraft. Diplomats and airline officials said it was also believed to be carrying a top official of the Economic Community of West African States, a Nigerian presidential aide, two Britons and a German.
"It would be a miracle if anyone survived," one man at the crash site said.
Distraught relatives wailed and prayed at Lagos airport as a Bellview Airlines official read out a list of passengers. The list may not be entirely accurate because tickets are often transferred between people in Nigeria, the official said.
State television said the nation would hold three days of mourning.
"It would be a miracle if anyone survived"
Crash site witness
The route the airliner was taking is heavily travelled, with dozens of flights each day between the port of Lagos, one of the world's biggest cities, and Abuja in the heart of Africa's most populous nation.
Aviation analysts said the age of the aircraft, which was at least 20 years old, may have been a factor in the crash, but they asked why there was so much confusion and delay in finding the crash site.
In the early hours after the crash, reports conflicted.
Government television regulator Nigeria Broadcasting Commission said it would suspend the operations of AIT television for showing explicit images of the crash scene and delivering what it called unsubstantiated information on the disaster to the public.
Bellview Airlines is a privately owned Nigerian airline and is popular with expatriates. It recently began international flights to India and London.
In Seattle, Boeing spokeswoman Liz Verdier said the company would work with the US National Transportation Safety Board if the board was asked to help with any investigation in Nigeria.
She said the 737 was the "workhorse of the world commercial jet fleet".
More than 140 people died in May 2002 when a Nigerian airliner slammed into a poor suburb in the northern city of Kano, killing people on board and on the ground. The aircraft ploughed into about 10 buildings shortly after take-off.