South Central Railway officials said the accident occurred between Masayipet and Wadiaram railway stations on Secunderabad-Nizamabad section of Hyderabad division at 9.10am.
The bus was ferrying at least 40 children to a private school - Kakatiya Techno School - located at Tupran. Three of the children travelling on the bus are safe.
The bus driver was also killed on the spot. The bus was dragged several hundred metres down the tracks.