A woman has been charged after she allegedly stole a car and slammed it into a school bus in Melbourne’s southwest, with children on board forced to take cover as shots were fired.

The incident unfolded near the intersection of the Princes Highway and Roebuck Street at Newtown, near Geelong, about 3.40pm on Thursday.

Police allege officers identified a Kia Optima that had been stolen from NSW and attempted to stop it. The car then reversed into a school bus near Matthew Flinders Girls Secondary College as the driver tried to flee.

Footage filmed from inside the bus and later uploaded to Reddit shows children screaming as the car crashes into the side of the bus, before the sound of gunfire is heard as students duck for cover.

Police allege the Kia was then driven at officers, who fired shots at the vehicle. The car subsequently collided with another vehicle.

A 43-year-old woman from NSW was taken to hospital under police guard with minor injuries and has since been charged with handling stolen goods. She is due to appear at Geelong Magistrates’ Court on March 31.

A 37-year-old man remains in hospital under police guard with a non-life-threatening gunshot wound to his arm.

A Victoria Police spokesman said a man and woman from NSW were inside the Kia and fled the scene on foot, before being arrested nearby.

A female driver involved in the second collision was also taken to hospital with minor injuries.

No students were physically injured in the incident.

Police are urging anyone with information or footage to contact Crime Stoppers.

Images: 7News