He had tried unsuccessfully to free the driver before she managed to clamber from the car herself, he said.
Les Cockeram, Tranzit Coachlines Wairarapa manager, said the bus was on a 7.30am run from Masterton to South Wairarapa towns.
He said the children had "obviously got a bit of fright" but all had gone on to school.
Mr Cockeram commended the driver of the bus for avoiding a head-on collision after he saw the vehicle coming towards the coach.
"Our driver did very well. He saw her coming, she just kept on coming, and he manoeuvred the bus so she went into the side."
Masterton police Constable Hayden Robinson said the woman, 46, had been driving north on High St soon after 7.30am with two girls, aged 12 and 14, when she fell asleep at the wheel and crossed the centreline into the path of the oncoming coach.
All involved in the collision had escaped injury, including the woman driver and her passengers, he said.
The woman had been returning home to Masterton after farewelling her daughter at Wellington Airport, he said.
The southbound bus was struck "a glancing blow" on its right side and the woman's car had careered down the road before coming to rest near the intersection of High St, which is also State Highway 2, and Fleet St.
The car was extensively damaged and a panel was torn from the side of the bus.
Mr Robinson said a decision about charges would be made after an investigation.