Early reports suggest that the cleaner rather than driver was driving the vehicle when the accident happened.
The bus belonged to LV Reddy School and reportedly had a total of 40 children on board.
It plunged into Tungaram canal in Kothagudem Mandal while trying to avoid a collision with a bike, said an eyewitness.
The accident also left 18 children injured. They were rushed to a nearby hospital.
In a similar mishap in the state last month, four students died after their school bus fell into a river in East Godavari district.
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