The boy, a student at Irrawang High School, was crossing the intersection of Mount Hall Road and Clyde Circuit - near his school - at about 8.30am when he was dragged underneath a turning bus. The driver, a 41-year-old man, called emergency crews but the boy died at the scene.

Distraught students who witnessed the incident - they had been on their way to Irrawang High and other nearby schools - were put on another bus and taken from the area. The driver, who was reportedly in shock, was transported to Maitland Hospital for mandatory blood and urine testing.

The Newcastle Herald has chosen not to publish the boy's identity.

Port Stephens-Hunter Police Sergeant Paul Doherty said it was not yet clear whether speed was a factor in the crash and he would not comment on whether the 17-year-old was wearing a helmet when the collision occurred. He said police and counsellors were working with the students who witnessed the incident.

Sergeant Doherty said the situation would have been "particularly distressing" for the students on the bus.

"It was a very challenging situation ... there was a lot of children involved," he said.

"It's always difficult under these circumstances."

An Irrawang High spokesman confirmed the boy was a Year 10 student at the school.

The school extended its "sincere condolences to the family and many friends of the student".

"Counselling support is in place at the school and other local schools for students and staff who may have witnessed or been affected by the incident," he said.

Hunter Valley Buses said on Tuesday afternoon it was cooperating with the police investigation.

The company said the bus driver was taken to hospital suffering shock and was receiving counselling.

A spokesperson said the company would offer its condolences to the 17-year-old's family "at the earliest opportunity".

"Immediately following the incident, the driver contacted emergency services via mobile phone," the spokesperson said.

"Hunter Valley Buses also maintains two Operational Control Centres (OCCs), which can both monitor distress calls. At the time of the incident, the OCC operator on duty was on the phone to the company's digital radio services provider to report a disruption to two-way radio communications.

"However, it is important to note that the driver had already directly contacted emergency services prior to the OCC being notified. There was no delay in alerting emergency services."

A resident near the intersection of Clyde Circuit and Mount Hall Road, who asked not to be named, said he heard a bang when the crash took place.

He said there had not been an incident like it in the decade he had lived in the street.

Police kept a stretch of Mount Hall Road closed until after lunchtime on Tuesday, when the scene was cleared and the bus was towed away for further testing.

The investigation is ongoing and police will prepare a report for the coroner.

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