The toddler was with her mother, grandmother and baby brother at Caboolture, north of Brisbane, early on Monday night when she ran into the path of a Nissan Navara utility, police said.
The girl suffered catastrophic injuries and was declared dead at the scene, just a few hundred metres from the family home.
The 49-year-old female driver who lives in the area stopped at the scene and is assisting with the police investigation.
Police said the woman was distraught, with indications she had been turning slowly and did not see the child run onto the road.
The family had just collected the children from a nearby daycare centre and were walking home.
Police described the crash as "nothing short of tragic".
Investigators are reviewing CCTV and dashcam footage while also speaking with witnesses to determine how the child came to be on the road.
"It appears that (the driver) was just making a right-hand turn. It appears that she hasn't seen anyone and has struck the child," Sergeant Greg Price said on Wednesday of the tragedy.
"The driver stopped, but I think the driver wasn't aware of what happened, and when she became aware, she was just physically distraught."
Neighbours rushed to the scene, but the child's injuries were beyond the help of first aid.
Officers have urged anyone distressed by the incident, including community members who attended the scene, to seek support.
No charges have been laid, with inquiries continuing.
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