The section of the rail line at Kembla Grange will be closed for days after a train derailed early on Wednesday.
At around 4am, emergency services were called to the level crossing at West Dapto Road where a northbound train had hit a car parked on the tracks.
The impact caused the front carriage of the train to separate and roll off the tracks onto its side.
The train driver and three passengers were taken to hospital for minor injuries.
A Transport for NSW spokeswoman said it will take days to remove the train and repair the damage to rail infrastructure.
"Police and emergency services remain on scene where there has been substantial damage to the overhead wiring, signaling, and associated infrastructure," the spokeswoman said.
"The section of line is expected to be closed for several days while repair work is carried out and the damaged train is salvaged."
During the closure buses will replace trains between Albion Park and Wollongong in both directions, with a shuttle train service is operating between Albion Park and Kiama.
Customers are advised to change trains at Wollongong or Albion Park.
The spokeswoman said that "those involved in this incident are receiving the support they need".
"We would like to thank the first responders for their assistance responding to this incident and helping our customers and staff," the spokeswoman said.