The snowman sat in a calm residential street on the Urbana campus of the University of Illinois, south of Chicago, as reported.
The snowman was built by students, who waited in hiding to film the reactions of approaching traffic.
The public transit bus can be seen in the footage, uploaded onto YouTube, deliberately veering onto the wrong side of the road to take out the sculpture.
Moments earlier a motorist driving on the correct side slowed down to cautiously avoid the snowman blocking his path, before the bus came from the other direction and hit the obstacle at full speed.
The students scream with laughter before yelling 'No!' as the four foot high snowman is shattered.
The YouTube video, called 'Insane Bus Driver Brutally Murders Snowman', has been viewed over 26,000 times since being posted.
The bus driver quitted his job after the video was made public, said Champaign-Urbana Mass Transit District spokeswoman Jan Kijowski. Ms Kijowski said the district had laid down the rule to all the drivers.
'Whenever an incident occurs, we try to use it as a teaching occasion to remind the operators what are the safe and good choices that can be made,' Ms Kijowski said.
The video has sparked heated debate on social media sites about whether it was the driver or the creators of the snowman at responsibility.
A 2,000 strong Facebook group set up to get the driver his job back as they think he performed a civic duty in removing the blockage.