The Rail, Tram and Bus Union on Wednesday said drivers would take industrial action from 2.01am on Monday, before they run an indefinite ban on logging into bus consoles.

The union understands that failure to log into consoles will stop Opal card readers from working, giving passengers a free ride.

No bus services - including school routes - run by Keolis Downer's Newcastle Transport will operate due to the industrial action on Monday. Services are expected to resume at 5am on Tuesday. Light rail and ferries will run as normal.

Drivers are calling for a seven per cent pay increase over two years, rather than four years, in line with rising cost-of-living pressures.

"We find ourselves back at square one when it comes to negotiating the Enterprise Agreement with Keolis Downer," RTBU NSW tram and bus division president Daniel Jaggers said.

"A seven per cent increase over two years to help offset cost-of-living pressures is a fair ask from drivers who just want to earn a decent living wage.

"All this could be avoided if Keolis Downer would budge from the original insufficient offer made to drivers, which would see their wages go backwards. The private operator's solution was to then tell members they could earn more if they worked more - what an insult."

A Keolis Downer spokesperson said on Wednesday the company would "continue to negotiate in good faith to reach an outcome for our people".

"We ask the RTBU to focus on discussions with us to resolve this agreement, rather than resort to industrial action which impacts thousands of Newcastle Transport customers," the spokesperson said.

"There are people, including school students, who rely on Newcastle Transport bus services as their sole means of transport who are unable to travel during strikes. It is disappointing our people are choosing to take industrial action and we share our customers' frustration that our services will be disrupted."

The union last week flagged it was planning industrial action in the form of drivers refusing to take fares.

The action comes after a protest in Newcastle earlier this month.

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