Emergency services were called to the crash at 3.45pm at the level crossing near the Finegand freezing works. The trailer jackknifed and whey was spilt across the road.
Senior Sergeant Richard Whitmore, of Balclutha, said the tanker and tanker trailer unit was travelling on the Owaka Highway, when the male driver lost control on a corner, tearing up a section of railway line before the tanker and its trailer jackknifed.
No other vehicles were involved, and police inquiries were continuing, Snr Sgt Whitmore said.
Fonterra southern operations manager Keith Mason said the company's driver was not injured, but was examined by St John ambulance staff as a precaution.
Fonterra was conducting its own investigation, he said.
A KiwiRail spokeswoman said about 20m of track was damaged on an industrial trunk line between Balclutha and Finegand. KiwiRail staff arrived at the crash scene shortly after 4pm, and repairs to the railway line were expected to be completed by 9 last night.
Repairs to the line were not expected to cause any railway disruptions as it was an industrial line.
One of the railway crossing signs was also damaged, and its pole snapped.
Members of the Balclutha Volunteer Fire Brigade and Clutha District Council contractors cleaned up the whey and mud from the road. Traffic was diverted along Yorston Rd and Finegand Township Rd for more than two hours as the scene was cleared.
Police want to speak to anyone who saw the crash, and asked witnesses to call the Balclutha police on (03) 418-0203.
