The Indianapolis Star reports the ads would give cash-strapped school districts a way to raise revenue without increasing taxes.
The bill passed the Senate 49-0 as part of an amendment to another bill. It now goes to the House.
One of the districts affected would be Indianapolis' Franklin Township schools, which drew the ire of parents when it started charging for bus rides. The plan was later dropped.
The pilot plan would also allow school bus ads in Beech Grove and Zionsville.