A Virgin Australia flight bound for Perth was forced to make an emergency landing in Melbourne on Monday night after crew reported an issue with one of the aircraft's engines shortly after take-off.

The Boeing 737 had departed Melbourne just after 6pm and was still climbing when pilots issued a mayday distress call.

Early reports suggested there may have been an engine fire, prompting the crew to turn the aircraft around and return to Tullamarine airport.

Emergency services were placed on standby as the plane approached the runway, however no signs of a fire were detected when the aircraft landed safely.

All passengers and crew disembarked without incident and were later transferred onto another flight to Perth.

A Virgin Australia spokesperson confirmed the aircraft had experienced a technical issue and was undergoing inspection by engineers before being returned to service.

The airline apologised to passengers for the disruption.

The incident comes as aviation authorities continue to investigate the cause of the engine problem.