The bus was carrying six children when it collided with a car and was overturned near the intersection of Windsor Street and West Market Street in Richmond about 3.30pm.
None of the children have serious injuries.
“All the children managed to get out of the bus unassisted,” NSW Police said in a statement.
“A number of the children suffered minor cuts and scratches and are being treated on scene by NSW Ambulance paramedics.”
Police said the driver was taken to hospital for mandatory testing.
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Road diversions are in place and West Market Street remains closed to traffic.
Susan, who witnessed the crash, told 2GB’s Chris O’Keefe the children appeared shaken but were not injured.
“The children I can see are sort of school-aged children, probably primary school-aged,” Susan said.
She said the traffic seemed to be flowing well as it was only impacting one small section of the main street in Richmond.