Isabelle Miller, 14, ran to the steering wheel and directed the bus, after it began rolling towards a fuel station while parked outside her secondary school in the town of Casino, New South Wales.
A petrol station worker said the Year 9 student helped prevent "a disaster".
Footage shows the bus rolling from outside Casino High School, across a main road, and directly towards North Casino Mini Mart. Drivers were filling up their cars, apparently unaware of the approaching danger.
Quick-thinking Isabelle managed to steer the vehicle to safety, saving around 20 youngsters on board from a potential crash. Despite having no driving experience, she found the brake pad and brought the vehicle to a stop.
In an interview, she told how she had only boarded the bus to chat to some friends before they were driven home.
"It started heading towards the shop across the road, and it started heading straight where the petrol tanks were. And everyone was freaking out...nobody was doing anything to stop the bus, and steered it away.
"I was pretty relieved that it actually stopped, and nothing bad happened to the kids on the bus and to myself."
Faith Pittman, who works at petrol station, told the Guardian: "The brake went, I assume, and it started rolling, and as it’s a slight hill it picked up speed.
"But the young girl has run up to the front of the bus and put on the brake and snapped the wheel the other way.
"If it had hit the pump, it would have blown the whole place up," she added. "As you can imagine, it definitely could have been a disaster."
The bus driver was believed to have been talking to a teacher at the time. He ran after the bus as it rolled away, she said.
Casino Mini Mart manager Erin Witton thanked Isabelle for her quick thinking and "act of courage and bravery".
"[If] she hadn’t done what she did, [last] Wednesday afternoon could’ve ended catastrophically," she wrote on social media.
"All the team at North Casino Mini Mart are in debt and just super thankful for this beautiful young lady."
Casino High School principal Trent Graham also praised Isabelle, telling The Sydney Morning Herald: "Even though the incident was really quite surprising, the reality is Izzy’s actions didn’t come as a surprise to me or anyone at the school. She’s a fabulous student."
Mayor Robert Mustow also thanked the schoolgirl for preventing "what could have been a severe incident", the newspaper reported.
The bus company and New South Wales police are said to be investigating the incident.