Police said the bus, containing 49 passengers from the Perisher snowfields, was travelling along Kosciuszko Road near Wilsons Valley about 4.30pm, when the driver noticed smoke coming from the engine.

The 56-year-old male driver stopped the bus and all passengers exited before it erupted into flames.

Officers from the Monaro and Traffic and Highway Patrol Command attended and assisted in transporting the passengers to a nearby ski lodge.

Fire and Rescue from Jindabyne and Perisher Valley attended and extinguished the blaze, however, the bus was completed destroyed.

The road was closed in both directions for a number of hours.

No one was injured. Inquiries are continuing.