The video shows a tipper truck stopped on the tracks at Maldon at midday when a freight train ploughed into the vehicle at 60km/h.
The driver of the truck can be seen leaving the vehicle’s cabin just moments before impact.
The crash caused the truck’s load to spill onto the tracks and brought the tanker train to a standstill.
The section of railway where the train and truck crashed is used for freight only but is causing cancellations and delays for passengers travelling between Picton and Campbelltown on the Southern Highlands line.
“A limited number of buses are replacing trains between Picton and Campbelltown on the Southern Highlands Line due to an incident requiring emergency services near Picton,” Transport Management Centre (TMC) said in a statement.
TMC said trains were still running between Picton and Moss Vale.
“Passengers are advised to delay their trip, make alternative arrangements or allow plenty of extra travel time.
“Passengers should also listen to announcements and check information displays for service updates.”
TMC is investigating how and why the truck stopped in the middle of a live level crossing.