The school van smashed into the loaded dump-truck on a road near Nawabshah, about 270 kilometres north of Karachi.
The students, all of whom were from the Bright Future School of Daulatpur, were going to take their examinations.
"The accident took place on the Qazi Ahmed link road which is outside Nawabshah and connects to Daulatpur," a police official said.
At least 23 people were killed out of which 19 were children, officials said. The school children were aged between 12 and 16.
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Three women teachers, a male teacher, the driver and the cleaner of the bus were among those killed in the accident.
About 20 others, including teachers and students, were injured and taken to People's Medical College Nawabshah for treatment. Six of the injured persons were reported as critical and were subsequently shifted to the Intensive Care Unit (ICU).
"The government has taken notice of this tragic incident and we are investigating the matter," a official in the health department said.
Pakistan has a dubious record of fatal traffic accidents which can be blamed on poor roads and reckless driving.
President Mamnoon Hussain expressed sorrow over the incident and condoled the death of the students.
Pakistan Tehreek-e-Insaf chairperson Imran Khan and Muttahida Qaumi Movement chief Altaf Hussain also expressed grief over the loss of lives.
In a separate accident near Multan, eight schoolchildren were injured when their passenger rickshaw was hit by a van near a railway crossing.