The 15 students of a private school, who sustained serious injuries in the mishap that occurred in Yeldurthy mandal of Medak, were rushed to various hospitals in Hyderabad.
Police said the toll may rise as some of the children were critically injured.
According to Telangana Government Railway Police Inspector General Kripanand Tripathi Ujela, 12 boys and the school bus driver were killed on the spot after their bus was hit by the passenger train.
"The injured students have been rushed to different hospitals in Hyderabad," the IG said.
State Chief Minister K Chandrasekhar Rao reviewed the situation with Chief Secretary Rajiv Sharma and DGP Anurag Sharma. He ordered the officials to take necessary steps to extend all medical assistance to the injured.
Telangana Irrigation Minister T Harish Rao and Transport Minister P Mahender Reddy visited a hospital where the injured were admitted and also rushed to the accident spot.
State Home Minister Naini Narsimha Reddy expressed his condolences and said a thorough inquiry will be conducted.
"It is a sad incident. A thorough inquiry will be conducted and action will be taken against those responsible," he said.
South Central Railway officials said the accident occurred at an unmanned railway level crossing between Masayipet and Wadiaram railway stations on Secunderabad-Nizamabad section of Hyderabad division at 9.10 AM.
The private school bus came on to the railway track and was hit by Nanded-Secunderabad Passenger train which was passing through.
"On receipt of the information, a medical relief van was immediately rushed to the spot from Nizamabad and Secunderabad and senior railway officials, including medical team from Secunderabad, were rushed to the accident spot, so as to undertake immediate relief and rescue measures. The injured have been shifted to the nearby hospitals through ambulances," a SCR official said.