The train stopped four kilometres north-east of Horsham, near the Henty Highway and River Heights Road, after a metal seal broke on a cylinder carrying 24,000 litres of terpene hydrocarbon, valued at $200,000.

A tractor had earlier fallen off the train at Stawell but police believe the two incidents were not related.

Police, the Country Fire Authority, State Emergency Service and paramedics were called to the chemical leak at 12.10am yesterday.

Sergeant Dale McIvor of Horsham said a section of the Melbourne to Adelaide rail line and the Henty Highway were closed for five hours.

Sgt McIvor said the train stopped at Dooen because it had lost air pressure in the brake lines.

The train's two drivers inspected the rear of the train and noticed damage to a cylinder.

"They saw gas leaking and one driver was slightly overcome by the fumes," he said.

"It was terpene hydrocarbon, which is not a noxious gas but it's volatile, a flammable liquid, which can irritate the skin, eyes and mucous membranes."

Sgt McIvor said police cordoned off the area while fire-fighters repaired the leaking cylinder.

Police and rail authorities investigated the cylinder leak yesterday.

CFA Region 17 fire officer David Chugg said the cylinder's seal had broken because of wear and tear.

"There was no indication of a collision," he said.

Mr Chugg said people could have been in danger if there had been an explosion.

"The community could have been in danger if it had caught fire," he said. "There were rural properties to the east and the wind was coming from the south-west."

Mr Chugg said the terpene hydrocarbon, used in cosmetics, had leaked through a damaged seal.

"The fire-fighters wore breathing apparatus and protective clothing because the liquid is highly flammable and gives off toxic fumes if it catches on fire," he said.

Mr Chugg said 20 fire-fighters and 10 SES members attended the scene.

He said five wagons stayed at a siding at Dooen but the train left for Adelaide once the cylinder was fixed.

Sgt Michael Collins of Stawell police said the Kubota tractor that fell off a wagon 10 metres north of the Colquhoun Street rail bridge was smashed to pieces.

"None of the residents was in danger though because it was at a cutting through a hill so the residents are up high," he said.