The incident took place at about 9am on Friday when the man was driving along Middle Falbrook Road near Muswellbrook.
He drove through the Camberwell and Mount Owen Crossing in Glennies Creek, before colliding with a northbound coal train.
NSW Police said the railway crossing was signposted with a stop sign, however there was no electric barrier in place.
The man, who was aged in his 50s, died at the scene.
The driver of the coal train which struck the car was uninjured and is now assisting police with his inquiries.
A spokesman for the Australian Rail Track Corporation told ILN on Friday the accident had temporarily shut down the line, halting normal freight services.
Services on the track were restored by 5pm that evening.
A QRN spokesman confirmed the empty coal train involved in the incident belonged to the company.
“QR National has confirmed that one of its coal trains was involved in a level crossing collision near Singleton today,” the spokesman said in a statement.
“Both train drivers are badly shaken but are otherwise uninjured.”
QRN said it would assist the ARTC, NSW Police and the Independent Transport Safety Regulator with their investigations into the collision.