A bus carrying children home from primary school in the US crashed killing at least five children and hospitalising nearly two dozen, authorities said.

The driver, identified as Johnthony Walker, 24, was taken into custody and faces five counts of vehicular homicide, reckless endangerment and reckless driving charges, police said.

Speed appeared to have contributed to the crash, which happened at 4pm local time in Chattanooga, Tennessee, police added.

The bus was carrying 37 students from Chattanooga's Woodmore Elementary School and was travelling about a kilometre from the school when it veered off a road, flipped onto its side and smashed into a tree, police said.

It was not clear how many children were on the bus when it crashed but they were aged between five and 10 years old.

"It's the toughest thing you'll ever do in your life. There are no words that you can say, but let me say that our hearts are going out to the families, this is the toughest thing you can do," Hamilton County School Superintendent Kirk Kelly told reporters.

The crash left the bright yellow school bus wrapped around a tree, mangled and nearly severed in two.

Rescue teams were still sifting through the wreckage of the bus, which was resting on its side, two hours after the crash.