Four bystanders became local heroes after they dived in to rescue a mother and her toddler who were trapped inside a car which was sinking into a canal in Amsterdam.

It is thought the mother was the driver of the white car and had decided to park it in a bay close to the Schinkel River, The Dailt Mail reported.

However, when she walked out of the vehicle, it began to roll forward. She desperately attempted to free her young toddler from the car but it plummeted into the canal.

The shocking moment was captured on video and shows the quick thinking of several young men, who jumped into the canal to try and help.

Residents can be seen watching the terrifying event unfold in the canal as the men dived in to try and help free the people trapped in the car.

The white car quickly began to sink in the deep centre of the canal while the rescuers tried to calmly open the doors and extract the mother and her young child.

There has been conflicting reports on how the men managed to break into the car to free the passengers.

One of the rescuers, reportedly an office worker, saw what was happening and grabbed a hammer from his office and dived into the canal. He used the hammer to break the glass, the Huffuington Post reported. 

Local media said the four men carefully used stones to smash through the windows of the vehicle and carefully free the mother and toddlers. 

Upon freeing them, the rescuers managed to find enough energy to swim back to the edge of the canal, where they were helped out by several other locals.

The mother and toddler were taken to hospital and are now doing well after the incident.