The 51-year-old South Yarra woman was loaded into a police van on a sporting field at Westbourne Grammar yesterday and taken away for questioning.
Police asked the students to turn away while their teacher was arrested and placed in the van.
According to a News Ltd report, the teacher allegedly had a blood-alcohol content of 0.032 and was driving on a cancelled licence.
Police investigated the teacher over two incidents. The first was a two-car nose-to-tail crash in South Yarra and the second was a crash involving a vehicle and two parked cars in Tarneit.
The driver of the car responsible for the rear-end crash in South Yarra did not pull over.
The teacher faces a range of charges if she is found guilty, including drink driving, unlicensed driving, failing to stop at the scene of an accident and conduct endangering life.
The teacher was released from questioning yesterday and has taken extended leave, according to a Fairfax report.