Authorities said the bus apparently had stopped to pick up children when the boy began walking around the front of the bus. He was struck when the bus began moving forward, authorities said.
Waterford School Superintendent Newlin Schoener said the boy was running for the bus when he was struck. It was raining heavily at the time, he said.
It was not immediately known whether the stop arm, required under state law on school buses, was deployed at the time.
"It's a tragic loss. Our thoughts and prayers go out to the family," Schoener said.
The victim, a first grader at Atco Elementary, was pronounced dead a short time later at a nearby hospital, Schoener said. A sibling is a preschooler in the district, he said.
An investigation is underway to determine if any criminal charges will be filed, authorities said. Blood samples were taken from the driver, said Jason Laughlin, a spokesman for the Prosecutor's Office.
The driver was a substitute driver with 25 years' experience, Schoener said. His name was not released.
He is employed by Hillman's Bus Service in West Berlin, said Dan Hillman, general manager. He declined further comment.
"It's a tragic event that occurred," Hillman said.
Schoener said the children on the bus were first graders and kindergartners, and attended the same school as the victim.
School officials believe the students were unaware that a classmate had been fatally struck, Schoener said. They were transferred to another bus and transported to school.
Parents were notified and it was left to them to inform their children about the accident, Schoener said. Grief counselors were available and will return to the school Tuesday, he said.
"I want the world to know what a great, great child he was," Candice Bock said. "To everybody, hug your child. . . . Don't take for granted that you're going to have every day with your kid, because you're not."
The bus passed a 180-point state inspection last July, said Elyse Coffee, a spokeswoman for the Motor Vehicle Commission.
The driver's license, medical, and criminal background check records are "up to date and current," she said.
Hillman has an excellent inspection approval rating, with 94 percent of its fleet passing on initial inspection, state records show. School buses must be inspected twice a year.
According to the National Highway Traffic Safety Administration, 123 school-age pedestrians have died in school-transportation related crashes since 2002. Two-thirds of those were struck by school buses.