About 600 bus drivers have walked off the job for 24 hours in Geelong, Ballarat and parts of Melbourne as part of a wage dispute — and their union is threatening further action if it's not resolved.

Transport Workers Union (TWU) members who drive buses for CDC Victoria began striking at 4:00am in the first industrial action of its kind in two decades.

The company is offering a wage increase of 2.5 per cent but the union is arguing for 4 per cent.

The strike was expected to shut down all of Ballarat's bus network and half of the bus network in Geelong.

Parts of Melbourne's east and west are also affected, including the Oakleigh, Sunshine and Wyndham depot bus routes.

TWU national vice president John Berger said 95 per cent of members had voted in favour of the strike action, which was the first such action by bus drivers for 20 years.

We don't take that action lightly so we apologise to the general public," he said.

Buses were left parked inside the Wyndham depot after drivers walked off the job. ( ABC News )

Fleets of buses were parked along strike picket lines at CDC depots in Wyndham, Oakleigh, Geelong and Ballarat, with drivers crowding at the entrance.

The company is understood to be offering a Sunday timetable service in Geelong but it was not clear whether there would be any services elsewhere.

Commuters were advised to make alternative arrangements.

'Lowest-paid, hardest-working'

Mr Berger said the strike was just the first step in the process and action would continue on Friday and next Tuesday if the dispute was not resolved.

Drivers make between $26 and $28 an hour and work between the hours of 4:00am and 1:30am, the union said.

The union said it was the the first strike action taken by drivers in 20 years. ( ABC News )

George Joseph, who has been driving for the company for nine years, said the wage increase offered was not good enough.

"I think in this industry we are the lowest-paid bus drivers and we are the hardest-working people."

Driver Rod Leitch said all of his colleagues were "fired up and keen to see this through".

"All our drivers have regular bus runs, regular people who get on the bus," he said.

"Yeah, we feel for the passengers, but there's a time when you have to look after yourself and … today is it."

The chief executive of CDC Victoria, Nicholas Yap, apologised to customers for the "significant disruptions" on 74 routes.

"Our drivers do a very important job and we feel this wage offer demonstrates our support for them," he said.

"I believe what we've put on the table is a fair and reasonable offer."

"We are working very hard trying to ensure they [the drivers] don't disrupt our customers, especially with school going back next week.

"We are mindful that we don't want any children to be left by the side of the road."

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Acting Premier James Merlino urged the drivers to continue to negotiate, calling the strike a "disappointing outcome".

"[It's] incredibly frustrating for consumers," he said.

"My message to the … parties is they urgently, immediately, get back to the negotiating table and resolve their issues."

Melbourne, Ballarat commuters unaware of strike

Signs posted along the affected routes in Footscray warned of service disruptions but were not clear enough, according to Dee Stanton, who was trying to get to a hospital medical appointment.

"It doesn't say X amount are cancelled or the whole day is cancelled so I just thought I'd wait," she said.

"I actually have an appointment at the hospital so I'm a little bit annoyed."

Dee Stanton was left waiting for a bus that never came. ( ABC News: James Oaten )

Shiee Shibu normally gets the bus along Geelong Road to work at Footscray and didn't know the buses wouldn't be coming.

"No, we were not aware the bus was not running. I would've been waiting and waiting," she said.

Ben Lever, from the Public Transport Users Association, had to get a lift from home in Ballarat to work at nearby Mount Helen.

He said the industrial action was having a significant impact on commuters in the regional Victorian city.

"I think there's been some issues with communicating it … because I was lucky enough to be able to get a lift with a colleague to work today but we saw a lot of people still waiting at the bus stops not really aware that the buses weren't coming," he said.

A full list of affected services is available on the PTV website.