Chartered bus was thought to be carrying guests from a wedding reception at a wine estate back to their accommodation.
Police in the eastern state of New South Wales said the accident in the picturesque Hunter Valley wine region took place at about 11:30pm (13:30 GMT) on Sunday near Greta, about 180km (112 miles) northwest of Sydney.
The coach reportedly rolled off a ramp at a roundabout on a foggy night, although the fog had not been identified as a cause of the crash.
“I understand they had been at a wedding together, it’s my understanding they were travelling together … presumably for their accommodation,” NSW Police Acting Assistant Commissioner Tracy Chapman said during a televised media briefing.
Two of the passengers were airlifted from the scene of the crash by helicopter, Chapman added.
Television coverage showed the light-coloured coach lying on its side after the accident, with a dozen emergency workers wearing high-visibility yellow vests working nearby.
The coach driver, a 58-year-old man, was taken to hospital where he underwent mandatory testing. He is expected to be charged over the accident, police said.
“He’s under arrest. He’s been the driver of a motor-vehicle collision where there have been fatal injuries and there will be charges pending,” Chapman said.
The Hunter Valley and its vineyards are a popular location for short breaks and weddings.
A local mayor said the bus that crashed had been travelling from a wedding reception at a nearby wine estate.
“All Australians waking up to tragic news from the Hunter send our deepest sympathies to the loved ones of those killed in this horrific bus tragedy,” Prime Minister Anthony Albanese said.
“For a day of joy to end in such devastating loss is cruel indeed. Our thoughts are also with those who have been injured,” he said in a message on social media.
The area is being examined by specialist forensic police and a Crash Investigation Unit.
The two worst bus accidents in New South Wales were head-on collisions within two months of each other in 1989, which killed 35 and 21 people each. Eighteen people died in 1973 when a tourist bus plunged down a slope after a brake failure.