The private Volvo bus with 44 persons on board was on its way to Hyderabad from Bhubaneswar when the mishap occurred between two culverts on the highway, police said.
The passengers were fast asleep during the accident.
The bus driver, who was also killed in the mishap, was drowsy and lost control over the vehicle, police said.
Police were also investigating the duty status of the driver since it was a long distance trip and two drivers were supposed to be on duty.
Nandigama Deputy Superintendent of Police Umamaheswara Rao is supervising the investigation.
The front portion of the bus was mangled and gas cutters had to be used to rip it open and extricate the bodies. Two cranes were also used to lift the bus from the canal.
Transport Minister Sidda Raghava Rao has ordered aninquiry into the mishap.
While nine persons, including driver Adinarayana Reddy were killed on the spot, one passenger died in a hospital at Nandigama while another died while being taken to Vijayawada.
After first aid, the injured passengers were shifted to two private hospitals in Gollapudi and Vijayawada.
Chief Minister N Chandrababu Naidu and Deputy CM (Home) N China Rajappa have expressed grief over the accident.
Six of the deceased have been identified so far while efforts were on to identify the rest using the reservation chart.
Most of the victims belonged to Srikakulam, Visakhapatnam and Vijayawada.
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