Ten people have been injured, including several children, after a car drove into a crowd gathered to cheer on a rugby team on Saturday, Australian officials have said.

Two of the injured, a five-year-old girl and a 67-year-old man, were in critical condition, while the rest were in stable condition at John Hunter Hospital, according to New South Wales police.

Officials said among the others injured, two were children while the rest were between 20 and 60 years old.

Police said they arrested the 18-year-old man driving the vehicle in Newcastle and were investigating what happened - adding that he would be subject to mandatory drug and alcohol testing.

They said the crash, in an area where around a thousand people had gathered, was not believed to be related to terrorism.

A dozen ambulances and three air ambulances responded to the incident.

Prime Minister Anthony Albanese posted on social media: "My thoughts are with everyone injured or involved in the horrible incident this morning in Newcastle.

"I want to acknowledge and thank emergency services and police for responding so quickly, and their ongoing work in treating the injured."

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Fans had lined local streets to farewell the Newcastle Knights ‌rugby league team, due to compete in the country's National Rugby League grand ‌final in Sydney on Sunday, when the incident occurred.

Newcastle Mayor Gavin Morris said in televised remarks that it appeared the driver lost control of the car that hit the crowd.