"We hereby confirm that our scheduled flight ET 302 from Addis Ababa to Nairobi was involved in accident today," the airline said in a statement.
"It is believed that there were 149 passengers and eight crew on board the flight but we are currently confirming the details of the passenger manifest for the flight."
The airline said "search and rescue operations are in progress and we have no confirmed information about survivors or any possible casualties."
The plane took off at 8:38 am (0638 GMT) from Bole International Airport and "lost contact" six minutes later near Bishoftu, a town some 60 kilometres (37 miles) southeast of Addis Ababa by road.
Prime Minister Abiy Ahmed´s office tweeted it "would like to express its deepest condolences to the families of those that have lost their loved ones on Ethiopian Airlines Boeing 737 on regular scheduled flight to Nairobi, Kenya this morning."
Ethiopian Airlines said it would send staff to the accident scene to "do everything possible to assist the emergency services."
It would also set up a passenger information centre and a dedicated telephone number for family and friends of people who may have been on the flight.
The Boeing 737-800MAX is the same type of plane as the Indonesian Lion Air jet that crashed last October, 13 minutes after takeoff from Jakarta, killing all 189 people on board.
The last major accident involving an Ethiopian Airlines passenger plane was a Boeing 737-800 that exploded after taking off from Lebanon in 2010, killing 83 passengers and seven crew.
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