Heavy flooding following a tropical cyclone in northern Australia swept a 20-carriage freight train off a bridge Tuesday, injuring the driver, as the storm system threatened to intensify.

The iron-ore train derailed following torrential rain in the Northern Territory caused by Grant, a tropical cyclone that triggered heavy flooding in some areas, swamping roads and stranding scores of people, police said.

Its two crew members both managed to escape and were assessed by medical staff who were sent by helicopter to the scene, with the driver later airlifted to hospital with spinal injuries, according to local media reports.

"The ATSB (Australian Transport Safety Bureau) has been notified of the crash and will take carriage of the investigation," Northern Territory police said in a statement.

An ATSB spokesman was unable to confirm media reports that some carriages bore hazardous chemical warning signs.

The Northern Territory's environment department, NRETAS, said it was examining whether any material from the train had leaked into the floodwaters.

"It's still unclear exactly what the components were on that train," a department spokeswoman said.

"We will definitely be sending down investigators who will do an environmental impact and check it all out, but it's inaccessible at the moment because of the floodwaters.

"All I can say is (we are) investigating. It is of concern."

The railway's operator, US-based Genesee and Wyoming, said a number of containers carrying "domestic consumables and copper concentrate" had derailed and 50 metres of track had been washed away.

Copper concentrate is considered a class nine environmentally hazardous substance.

Managing director Bert Easthope said the company had determined it was safe to resume operations after the cyclone was downgraded on Monday night and blamed "unexpected and isolated rainfall" for the accident.

He could not comment on whether anything had leached from the containers because the company had only been able to do an aerial assessment.

"We cannot determine the full extent of the damage until we undertake a more detailed ground assessment," Easthope said, adding that it will commence an investigation once "it is safe to do so".

Genesee and Wyoming has contracts with local manganese, iron ore, copper and gold mines and runs two dozen services a week between mine sites and Darwin's port.

Its trains run up to 1.8 kilometres (1.1 miles) in length and weigh as much as 4,500 tonnes.

Local government official Willem Westra Van Holthe said there was an "enormous amount of water flowing across the road" at the scene of the accident, describing the damage as "quite shocking."

"It's what I'd describe as a scene of devastation here," he said.

Westra Van Holthe said freight carriages were being carried downstream and "there's sheets of bitumen that have been lifted off and carried away".

"I've lived in the Territory for 27 years and I've never seen anything like it," he told the Northern Territory News.

Police said two people who were swept from the roof of their stalled car on a nearby bridge in the hours before the train derailed and managed to survive by clinging to a tree were "lucky to be alive".

Grant was downgraded to a tropical low on Monday but the weather bureau said it could hit cyclone strength again on Thursday as it moved off land and across the warm waters of the Gulf of Carpentaria.

Heavy rains and high tides were expected in the meantime, with minor flooding likely in some areas.

Cyclones are common in northern Australia during the December-February summer. A series of storms unleashed record floods across Queensland state last January, killing dozens of people and battering the economy.

Forecasters have warned of another exceptionally wet summer in 2011-12 due to a La Nina weather pattern in the Pacific Ocean.

La Nina is characterised by unusually cool ocean temperatures in the eastern equatorial Pacific and has been associated with strong rainfall in Asia and Australia.