A 14 month-old girl from the Sandringham Drive area of Sutton-On-Sea was taken to hospital in Grimsby, suffering from a suspected brain injury on July 28.
She was transferred to Sheffield Children's Hospital where she died from her injuries.
A 30 year-old local man has been arrested on suspicion of murder and is currently being interviewed at Skegness Police Station, Lincolnshire Police said.
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Detectives are appealing for information to trace a man they want to speak to in connection with the incident.
Thomas McMeekin was showing off in his new car before the crash, which left two young boys dead and two others with life-changing injuries.