"I thought something had happened to him, but then I saw him swinging on the sign and everyone cheering," he said.
"As soon as it fell off, they ran up the road but I don't know where they went."
He said he had also sent the video to police via Facebook.
"What they did was pretty bad. They should be punished," the driver said.
He believed all members of the group were teenagers and said they appeared to be drunk.
An Auckland Transport spokesman said the sign would be replaced as soon as possible.
"Street sign theft happens from time to time around Auckland. Most street signs like this cost around $140 to replace," he said.
A police spokesman said they would be looking into the video.
Anyone caught vandalising or stealing a sign can be prosecuted. The maximum penalties for theft range from three months to seven years' imprisonment, depending on the value of the property stolen.
The maximum penalty for a charge of intentional damage is three months' jail or a fine up to $2000.
Road signs can cost up to $300 each, and when stolen, it is the public who pays to replace them.
