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I am using SN74AVC2T45 level translator for driving a bicolour led. Since DIR pin is grounded, data flow is B to A. If the circuit to work, SN74AVC2T45 should be capable of sinking the current but the data flow is unidirectional. Will this circuit work with this level translator??
Yes. When LED_ETH_LINK_0 is high and _1 is low, the green LED will light. When LED_ETH_LINK_0 is low and _1 is high, the yellow LED will light. When both _0 and _ 1 have the same value, neither will light.
Those pull-up resistors are very strong, and on the A side probably not needed at all.
Just because you have two supplies does not mean that you need a level translator. Modern logic families have overvoltage-tolerant inputs (that are not damaged by input signals when powered off), so you could simply use a two-channel buffer like the SN74LVC2G34/17.