The Australian Rail Track Corporation (ARTC) says services may not be back up and running like normal near Denman until early next week.
A train understood to be Pacific National, derailed in the early outs of Wednesday morning on the Sandy Hollow-Gulgong line near Baerami.
ARTC confirmed that six wagons derailed.
The Independent rail safety investigator and regulator are investigating and handed the site back to the ARTC so they could commence the clean up on Wednesday afternoon just before 5pm.
An ARTC spokesperson said that work to remove the wagons is underway and once they are taken from the site track and signalling repairs will begin.
Approximately 1.7 kilometres of track needs to be repaired which includes replacing sleepers and rail.
"The current forecast for services to resume is early next week, subject to all works going well," a spokesperson said.
"While the recovery of the derailment site and repair works are underway, ARTC will also take the opportunity to repair and improve the condition to the level crossing at Rosemount Road, Denman,"
"Motorists are advised there are detours via the Golden Highway and traffic management will be in place."
Image credit: ARTC