In 1948, the State Govt. took over operation of bus services run by erstwhile princely states under State Transport Services (STS) of Transport Department.

In 1950, the Central Act, R.T.C. Act was enacted (Act No. 64 of 1950) which required creation of Road Transport Corporations under respective State Governments. The OSRTC was created w.e.f. 15.5.1974 and the assets and employees of State Transport Services were transferred to the O.S.R.T.C.

The Corporation started functioning with Share Capital Contribution from the State Govt. and the Central Govt. in the ration of 2 : 1.

The O.R.T. Company, operating mostly in the southern parts of the state merged with the OSRTC in 1990 along with all its assets, liabilities and employees.