The Islamic militant group, Boko Haram, is believed to have been behind the shooting down of the Nigerian Air force helicopter that was on a training mission around Borno state, local daily claims.
Two Air force personnel were killed in the crash.
The Mi-35, which is a gun-ship and attack-helicopter, was flying over south of Bama, which is close to the rebel-held town of Damboa, when it lost contact with the communication center and later was found to have crashed.
The helicopter was on a training mission and was blown off by Boko Haram insurgents on Monday, reported Nigerian daily - The Punch.
The Nigerian government officials has maintained that the helicopter had crashed over a technical failure, but a probe has been ordered.
"Investigation has commenced to unravel the circumstances that led to the accident," Director of Information, Major General Chris Olukolade told the daily.
The pilot and a technician onboard the Mi 35 were killed in the crash, while the co-pilot is said to have been pulled out alive, Premium Times reported.
Over last week, a larger portion of Borno, mainly the trading town of Damboa has fallen under the control of Boko Haram.
It is reported that the Islamic militants killed at least a 100 residents of the area, before hoisting their flag and setting up security blocks in the town.
The militants have reportedly blew up a connecting bridge to Damboa from Borno state capital, Maiduguri, cutting-off all access to the town for the military.
Boko Haram militants are now in total control of the key town located in north-eastern Nigeria, a local vigilante leader confirmed to BBC.
Following the capture of Damboa, the Borno state capital, Maiduguri, located about 85 km away, has been facing severe power shortage, as rebels reportedly also have damaged all the power supply lines into the capital.
The Boko Haram invasion of Damboa has reportedly displaced at least over 10,000 from the town, who have fled to neighboring villages and cities for safety.
Boko, since 2009, has been waging an internal war in the country to create an Islamic state. In April, the group gained international notoriety for abducting more than 200 girls from their boarding school at Chibok in Borno.