The American military has taken over an investigation into the death of three Marines during a training exercise on a remote island off the Northern Territory.

NT Police were leading the response after a horror military aircraft crash on the Tiwi Islands on Sunday August 27.

There were 23 troops on board the tilt-rotor military aircraft when it went down, with the two pilots and crew chief understood to have sacrificed their lives to avert a catastrophic crash killing all on-board.

Under the Commonwealth Defence Visiting Forces Act, the Territory coroner was barred from holding an inquest into the three marines’ deaths with the initial reports passed onto the American authorities.

Three American marines have been killed in a horror crash during a military exercise off the coast of the Northern Territory.

The Marine Rotational Force Darwin confirmed three of their personnel had died, while another five were flown to Royal Darwin Hospital in serious condition following an Osprey crash over the Tiwi Islands at 9.43am, Sunday.

He said the aircraft, with 23 personnel on board went down while transporting troops during a routine training exercise, known as Predators Run, near Pickataramoor, Melville Island, 80km north of Darwin.

“Recovery efforts are ongoing,” a MRF spokesman said.

The cause of the incident is under investigation.

An Aboriginal land council has said it was partially briefed about the US military using a port on the Tiwi Islands to the north of Darwin.

The revelation came amid political argy-bargy at a Senate committee hearing about whether the Tiwi Land Council should publicly talk about the issue.

Senator Nova Peris asked the Tiwi Land Council about facilities at Port Melville.

"Has the Tiwi Land Council been briefed on the potential for the facilities to be used by US Marines or other US military organisation?" Senator Peris asked.

Tiwi Land Council executive member Andrew Tipungwuti was reluctant to go into details.

"We have been briefed on that but in part, it's not to the full extent," he said.

"If you'd really like to know, there is opportunity for any vessels floating around the Tiwi Islands, once the port gets to a development stage and does the processes, there's going to be opportunity for boats to pull in and fuel up."

Singapore-based company Ezion took out a sub-lease for Port Melville in 2010.

The Australian newspaper previously reported the company was in talks with the US military about storing military equipment there and had one day hoped to service military vessels.

Indigenous Affairs Minister Nigel Scullion had argued Senator Peris's questions were not relevant to the hearing.

"They're asking the land council whether or not they've been briefed about the use of land that's already been leased out and sub-leased in some cases," he said.

"It just seems that the questions are coming from the position as if the land council would still be in some sort of control of the land."

But Greens Senator Rachel Siewert intervened.

"All Senator Peris asked, I would have thought it was a fair question to ask, have you been briefed? It's a pretty important issue," she said.

Tiwi Land Council acting chief executive Brian Clancy told the ABC he was unable to comment further on the briefing.

The Port Melville redevelopment has now been taken over by AusGroup.

The port was subject of considerable controversy when it was revealed that construction this month that the developer ignored environmental assessment processes.