The Minister of Finance, Tevita Lavemaau, made the revelation in a government press statement.
Owner and CEO of Real Tonga, Tevita Palu, confirmed the situation but also gave his reasons for the airline being in debt for millions of dollars.
Mr Lavemaau said most of Real Tonga's indebtedness was to the government.
This is said to have been made up of the dry lease of two planes and landing fees that had not been paid.
China gifted Tonga two planes, a Y-12 and a MA60, to be used for domestic air services.