The helicopter had been bringing money to the town of Surman on its inward journey. However, it was felled near the Almaya area, west of Tripoli.
A spokesman for the Tripoli government’s chief of staff said the helicopter was targeted anti-aircraft missile while on its way back to the capital.
There were 23 passengers on its board including two high-ranking officers allied with the Islamist-backed Tripoli government.
Local reports say that 10 people were believed to have drowned, while four bodies have been pulled from the sea. Any survivors are yet to be found.
Libya has been struggling for stability since 2011 with armed groups and regional factions engaging in a conflict. The country is currently plagued by a conflict between two governments and their allied militants.
The capital, Tripoli, is controlled by a faction allied to powerful armed forces based in the city of Misrata. The faction has reinstated the previous parliament in the capital.