A group of TAFE students who dived into a Sydney lake to pull a driver from her sinking vehicle have been hailed as heroes by the woman's husband, who says she could have died without their intervention.

The landscaping students, aged between 17 and 20, had been returning from the Royal Easter Show where they were setting up an exhibit when they saw a woman hunched over her steering wheel as her vehicle travelled at speed along a road in Sydney Olympic Park on Tuesday afternoon.

From their bus windows, the students watched in horror as the Commodore station wagon ran off Edwin Flack Drive, crashed down a flight of steps, rolled down a hill and into a lake, where it began to sink.

The students yelled at their bus driver to stop before two of the students climbed out of the bus emergency window and dived into the lake, swimming about 10 metres to reach the trapped woman.