The incident happened on Friday evening when police were called to Astley Bridge in Bolton after reports that a man was standing on the bridge, threatening to drop a child into the river.
Specially trained police negotiators were called to the scene and attempted to speak to the man. They were unsuccessful in their attempts as the male refused to speak to officers, and the toddler was dropped into the river.
The three-year-old was quickly rescued from the water by a police officer already in the water. The child was taken to hospital, to treat her injuries which included a broken wrist.
The man fell into the water, which was around a 30-foot drop. He was removed from the river by police officers and taken to hospital for treatment to minor injuries. He was then arrested on suspicion of attempted murder.
Superintendent Paul Savill said: Thankfully the little girl will recover from her physical injuries, but the trauma she was put through is heart breaking. My thoughts are with her and her family.
We have arrested a man on suspicion of attempted murder, he will be questioned by police at the earliest opportunity.
We have a specialist team of negotiators who always try their utmost to resolve these situations without injury and get people the support they need. Sadly on this occasion the man failed to engage, however we had a second team waiting in the water to enable us to rescue the child within seconds of her entering the water.
We will now ensure that the little girl and her family have all the support going forward, to help her make a full recovery.
Greater Manchester Police told The Independent that the identity of the child would not be released until later on in their enquiries.
Stephen Lomax was at the Cineworld car park, near Astley Bridge, where he could hear the incident. He told Bolton News: I heard shouts and screaming, the man had a deep growl. The little girl must have been terrified.