Forty passengers were rescued as the bus fell at the side of the Vishnusamudra lake which was shallow but had accumulated silt, police and officials said.
The bus proceeding to Belur from Sakleshpur was reportedly carrying about 60 passengers, a good number of whom were school and college bound students.
Among the victims were two women and a 19-year old college student, police said.
Police said 36 passengers suffered minor injuries and 11 others had been hospitalised at Hassan with two of them stated to be in a critical condition.
The bus driver survived but the conductor died on the spot. Initial reports had said both had survived.
Using cranes, the bus was pulled out of the lake.
Transport Minister Ramlinga Reddy announced a relief of Rs 3 lakh each to the next of kin of the deceased.
