A tram driver is being investigated after a passenger caught him on camera allegedly reading a catalogue while driving.

The passenger uploaded footage of the alleged incident to video sharing website YouTube, claiming it was a 'very disturbing' ride.

He also tweeted that he disembarked the tram at the first opportunity because he did not feel safe.

Tram driver caught 'reading' while driving. Photo: YouTube

Yarra Trams says safety is the number one priority and the driver will be questioned.

"Tram drivers are well aware of the rules relating to safety and we investigate all incidents that come to our attention," A Yarra Trams spokesman said via statement.

"Yarra Trams has launched an immediate investigation and will interview the tram driver as soon as he reports for duty."