The accident happened on a road around four kilometres from Nawabshah when the tractor trolley hit the school van head on.
Seventeen school children were killed and 12 teachers and students injured in the accident, police said.
The school children were aged between 12 and 16 and all of them belonged to one school in Nawabshah, Geo News reported.
"The accident took place on the Qazi Ahmed link road which is outside Nawabshah and connects to Daulatpur," a police official said.
"The injured which included three female and a male teacher and students have been shifted to the civil hospital for treatment but condition of some of them is serious," he said.