'No human remains'
Rescuers later reached the plane on foot and confirmed it was Fossett's aircraft but found no human remains at the crash site.
John Anderson, the Madera County Sheriff, said photos of the site appeared to indicate that the plane had smashed head-on into a mountainside at high speed.
"The crash looked so severe I doubt if someone would have walked away from it.
"There was no body in the plane. We have not found any human remains at the crash site," Anderson said.
Mark Rosenker, an official from the National Transportation and Safety Board, said preliminary analysis of the site indicated Fossett had died in the crash.
"Information is indicative of a high-impact crash, which appears to be consistent with a non-survivable accident," he said, adding it would likely take "weeks, perhaps months" before the cause of the accident was determined.
Fossett's widow, Peggy, welcomed the discovery of her husband's plane.
"I especially want to thank Preston Morrow who made this discovery and turned Steve's belongings over to the authorities.
"The uncertainty surrounding my husband's death over this past year has created a very difficult situation for me.
"I hope now to be able to bring to closure a very painful chapter in my life," she said.
Documents bearing Fossett's name, including a pilot's licence, money and clothing, were found by Morrow, on Monday.
The Federal Aviation Administration, which would have issued the discovered documents, said it was trying to confirm their authenticity.
After an extensive search failed to find any trace of the millionaire businessman or his plane he was legally declared dead by a court in Chicago in February.
Fifty searchers and five dog teams have been deployed across the area in an effort to find remains of Fossett.
Anderson said search teams were racing against time with snowstorms forecast in the region.
"If it in fact snows, that's going to obliterate any hope of finding the remains or further evidence," he said.
Mammoth Lakes, on the eastern side of the Sierra Nevada range, is about 160km from where Fossett began his solo flight, a flight that had been expected to last for three hours.
The identification cards discovered by the hill-walker provided the first possible clue to Fossett's whereabouts since he disappeared on September 3, 2007, after taking off from a Nevada ranch owned by Barron Hilton, a hotel magnate.
In 2002, Fossett became the first person to circle the globe solo in a balloon and had about 100 other world records to his name.
He told reporters in 2005 that he had no intention of easing up on his record attempts.
"There's no reason to stop," he said.
Fossett's modest manner belied the passion that fuelled his costly and dangerous exploits.
"Frankly, I do them for the satisfaction of those achievements.
"I have a feeling of contentment and a satisfaction that I've done something faster or farther than anyone before," Fossett said.
Fossett shunned the media spotlight in the early years of his exploits.
His motives were personal, he said, and he had no interest in making appearances or going on book tours.
Towards the end of his life, however, he realised that publicising his adventures could be a public service and could help to inspire new generations of adventurers.