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Local people captured the man and handed him over to the police.
The incident occurred in a government-run school at Ambapada village in Niali block when the accused entered the classroom and attacked the teacher with a dagger, police said.
The teacher, a married woman of the same village, suffered grievous injuries in her hand, head and abdomen.
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The accused, also hailing from Ambapada, had run away from the school campus with the blood-stained weapon in hand.
A group of people chased and captured him from the bus stand when he was about to board a Bhubaneswar-bound bus.
Police and the locals are not able to figure out the motive behind the attack by the man who is father of three grown-up children.
Police claimed that the man appears to be mentally deranged.