The 24-year-old male who had been detained in relation to the fatal hit and run in the Phoenix Park on Monday was released without charge in the early hours of Wednesday morning.
A file will be prepared for the Director of Public Prosecutions.
Vanessa Siatka, aged almost two, was struck on the North Road by a car which failed to stop, at about 6.25pm on Monday. She sustained serious injuries and died overnight at Temple Street Children's Hospital. She has not been formally identified.
Gardaí at Cabra station are investigating the incident and arrested the 24-year-old man for questioning.
Garda sources have indicated he handed himself in for questioning as an investigation was being established to seek his identity.
A car was said to have been seen driving “erratically” in the area prior to the crash.
His period of detention at Blanchardstown Garda station under Section 4 of the Criminal Justice Act was extended by 12 hours from the original 24 hours on Tuesday.
Vanessa Siatka, who was from the Waterville area of Blanchardstown in west Dublin, was pronounced dead in hospital in the early hours of Tuesday.
The Phoenix Park was crowded with families over the weekend due to fine weather.
Gardaí have appealed for anyone who may have seen a green 02 D Toyota Corolla in the area at the time or who can assist with the investigation to contact Cabra station at (01) 6667400, the garda confidential line on 1800 666 111 or any other station.