The little girl was struck by a car outside Rosnakill Resource Centre in Fanad just before 12.30pm.
The little girl was rushed to Letterkenny General Hospital for treatment.
However, the child was later transferred to a Dublin Hospital to receive further treatment.
Local Parish Priest Fr Pat McGarvey is understood to have travelled with the child’s parents to the hospital and is supporting them.
A full Garda investigation has been launched into the circumstances surrounding the accident.
Garda Inspector Michael Harrison is leading the investigation into the tragedy.
It is believed the child was struck by a ‘people carrier’ type vehicle.
“An investigation is underway into the incident,” said a Garda spokesman.