Officials said they are investigating how an aircraft travelling to Calgary on Thursday night from Kelowna, British Columbia, plunged to the ground.
Local media report the plane was a corporate jet and that four people aboard died.
Mr Prentice held prominent cabinet positions, including Minister of Indian Affairs and Environment Minister.
Among those killed in the crash was Ken Gellatly, the father-in-law of one of Mr Prentice's daughters.
"Words cannot express our profound shock," the Gellatly family said in a statement.
"To lose two family members at once is unbelievably painful."
Canadian politicians have been paying tribute to Mr Prentice, including interim Conservative Party Leader Rona Ambrose.
She got to know Mr Prentice when they were both in the cabinet of former prime minister Stephen Harper and as federal representatives for the province of Alberta.
"He taught me how important it is to serve the people of Alberta and the people of Canada," she said, holding back tears while addressing the press on Parliament Hill.
Prime Minister Justin Trudeau also expressed his sorrow at Mr Prentice's passing.
"He was broadly respected in the House of Commons - on both sides of the aisle - for his intelligence, commitment and honest, straightforward approach on tough issues."
Former Prime Minister Stephen Harper wrote that Mr Prentice was "a proud Canadian".
"His legacy will live on through his loving family and decades of public service", the former PM, and Alberta resident, wrote on Twitter.
Members of Parliament have been tweeting their condolences.
"Through a storied career, Jim Prentice said a defining moment was voting same-sex marriage into law. Rest in Peace," tweeted Liberal MP Seamus O'Reagan.
"I'm heartbroken to hear my friend Jim Prentice was killed last night in a plane crash," wrote Green Party Leader Elizabeth May in a statement.
Mr Prentice first gained political recognition in 2004 after being elected to serve Calgary Centre-North.
Known as a "red Tory" for his socially progressive views, Mr Prentice voted in favour of a 2003 controversial same-sex marriage law, which he later called a defining moment in his career.
He retired from federal politics in 2010 to go into the private sector, but four years later mounted a successful bid for leadership of the Conservative Party in Alberta.
As leader, he was faced with the difficult challenge of uniting a party still reeling from spending scandals and from deep division within Alberta's right.
He successfully convinced nine members, including the leader of Alberta's right-wing Wild Rose Party, to cross the floor.
But in 2015, the Conservatives were voted out of office in Alberta for the first time in 44 years, losing to the New Democratic Party in a historic election.
The son of Eric Prentice, the youngest person to ever be drafted by the Toronto Maple Leafs, Mr Prentice moved from northern Ontario to Alberta as a child when his father went to work in a coal mine.
Although he never had a career on the ice, he said that he learned hard work from a young age, spending his summers away from university in a coal mine.
"I always said I got my education there," Mr Prentice once said about this time in the mines.
"I learned teamwork, I learned respect for other people. I learned the fact that the smartest guy in the room is often not the guy you think is the smartest guy."
He leaves behind his wife Karen and three children.
Former Alberta premier Jim Prentice, 60, has died in a plane crash, the Conservative Party has confirmed.