The Amtrak train was heading to Washington, D.C. It's unclear what caused it to come off the tracks.
Midtown Direct trains are being diverted to the HOB terminal and will be cross honoring tickets system-wide with New Jersey Transit bus, private carriers and PATH.
The Amtrak train was carrying 300 passengers and derailed between the north Tube and Penn Station, however was still able to pull in upright, according to WNBC, citing a source.
The derailment is not affecting service on the Long Island Rail Road at Penn Station, an MTA spokeswoman said.
Commuters who were on the passing NJ Transit train expressed relief and shock on social media after the incident. There are no immediate reports of injuries. Some trains backed up the line into New Jersey. Services were suspended due to the train derailment.
Jordan Geary, director of Creative Development at Sesame Workshop tweeted "what happened was "scary as hell" and the impact blew out a window".
"We are preparing a plan with some outbound service from NY only", said Nancy Snyder, an NJ Transit spokeswoman.
Amtrak and NJ Transit have not confirmed any collision took place. New Jersey Transit rail services into Penn Station were suspended for the day following the derailment.
Amtrak did not immediately respond to comment requests.
They advised riders to leave New York City early or stay late.