The accident claimed 16 lives, including that of oil worker Raymond Doyle, 57, from Cumbernauld.
The account was given on the first day of a fatal accident inquiry almost five years after the Super Puma plunged into the water off the Aberdeenshire coast.
Lidvar Olav Hildre, a ship's mechanic, was painting a railing on board the Normand Aurora, a platform supply boat sailing to Norway.
He heard a helicopter making a "normal buzzing noise" above the ship.
"Apart from the helicopter noise I didn't hear anything else, then suddenly there was silence," he said in a statement to police that was read out at the inquiry in Aberdeen.
"This made me look into the air, as this was unusual, and I saw on the starboard side of us an oblong shape falling like a torpedo towards the sea."
He said the weather was good with clear conditions and a calm sea.
"The object was obviously a helicopter but I couldn't believe what I was seeing. It fell silently towards the sea. I don't think there was any smoke or anything coming from the helicopter at that point.
"Just before the helicopter hit the sea, or just as the helicopter hit the sea, I cannot be sure which, I saw one flame come from the helicopter.
"I then saw, quite clearly, four large black rotor blades all attached together falling out of the sky towards the sea, separate from the helicopter."
As the only eyewitness account was read out, family members in the public gallery sat silently, some wiping tears from their eyes.
Fourteen oil workers and two crew were killed in the crash on April 1, 2009.
The inquiry is expected to last about six weeks.