UPDATE, 8.30AM: Local resident Jean Lewis, of Gregory Street, said she heard a loud bang around 6.30am.
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She assumed it was trackworks but came out of her house when said notice police had arrived.
Another resident said he heard a similar loud noise at the time.
Ms Lewis said it was the second time a train had struck something near the Gregory Street crossing.
At Christmas time a train struck a wheelie bin, she said.
EARLIER: A train has crashed into an abandoned car left on the train tracks in Wendouree this morning.
The train, which crashed into the car at the Burnbank Street crossing, was not believed to have been carrying any passengers and was out of service.
It is not believed the train driver was injured and the train did not derail.
The crash occurred about 6.30am.
The train line has been thrown into chaos between Ballarat and Wendouree this morning, while Burnbank Street is also blocked to road traffic.
Crime scene investigators are en route to the area.
Police have advised people to avoid the area as the scene will remain closed for some time.
Full V/Line service announcements can be found here.