At least one of those injured is believed to be a marshall at the event.
At least five ambulances and other emergency services attended the scenes and ferried the injured to hospital.
A Garda spokesperson confirmed that their investigation into the incident is ongoing.
A spokesperson said "Gardaí attended the scene of a single vehicle RTC on Main Street Clonmany, Co. Donegal on Wednesday evening August, 2022 at approximately 6.30p.m.
"The driver of the vehicle has an health incident and struck a number of pedestrians. The driver and three pedestrians were all removed to Letterkenny University Hospital with non life threatening injuries.
The Clonmany Festival attracts thousands of people onto the streets of the Inishowen town each year and lasts for a number of days.
Despite last night's incident the festival continued featuring singers David James and Derek Ryan.