The three-year-old boy is believed to have been on the road when he was struck about 8.15am today on Glebe Street in Glebe.
Police said emergency services performed CPR but the boy sadly died at the scene due to his injuries.
Detective Chief Inspector Grant Watson said the 34-year-old driver stopped nearby after the incident.
The man is undergoing mandatory testing in hospital.
A crime scene has been established and an investigation into the circumstances surrounding the crash is underway.
Detective Chief Inspector Watson said police are investigating why the child was on the road at the time.
“We are examining the circumstances as to why the child was on the road,” he said.
Police are currently “canvassing the streets” for witnesses who may have seen the boy on the road or witnessed the incident.
Anyone who saw the child or the vehicle on the street is urged to contact police.