One of the rickshaw drivers also died in the accident, which happened near the town of Lodhran in eastern Punjab province.
The children, all aged between six and 10, were on their way to school when the train ploughed into them.
Rescue official Dr Abdul Majid said another five children, aged between five and eight, were critically injured.
Police said the railway crossing was ungated and the worker responsible for manning it was missing from his post.
There was heavy fog in the area at the time and officers believe the rickshaw drivers may have misjudged the speed of the oncoming train.
Senior police officer Asad Sarfaraz said the assistant train driver and the railway worker responsible for the crossing had been detained for questioning.
Both were suspended after railways minister Khawaja Saad Rafique ordered an immediate investigation.
He said further action would be taken if the inquiry shows they were negligent.
“We have to investigate whether it’s negligence or if it happened due to heavy fog,” he said.
The train was heading to Karachi from the eastern city of Lahore.
It is the third deadly train crash in Pakistan in four months.
Twenty people were killed and dozens injured on 3 November, when a train crashed into stationary coaches in the port city of Karachi.
In September, at least four people were killed and 93 injured when an express train crashed into a freight train near the city of Multan in Punjab province.