The incident happened at the junction of Ribbleton Lane and St Mary's Street at around 3.10pm, Lancashire Police have confirmed.
A spokesman from the AA said that the road is blocked and traffic is queuing due to accident.
They said that the incident involves a "bus and two cars" on the B6243 Ribbleton Lane both ways at the junction with St Mary's Street.
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The spokesman added: "Police [are] directing traffic. Road has been blocked following an accident that reportedly occurred around 3.10pm."
A spokesman from Lancashire Police said the incident is down as "damage only" and it "doesn't look like there are any injuries". They also have the incident down as involving one bus and one car.
Delays are ongoing, with traffic queing passed HMP Preston and onto the A59.