Detectives child protection unit and the homicide and child trauma squads are investigating.
This marks the second suspicious death of a young child in Queensland in less than 48 hours.
The body was found on the edge of the surf of Surfers Paradise Beach and was unable to be revived by emergency services.
Expert police divers have begun the mission of searching for clues along the southern Gold Coast shoreline.
But it's believed the girl's mother, 23, will not face charges.
New South Wales Police confirmed on Tuesday night they will take over the investigation with help from the their Queensland counterparts.More news: #FacebookDown Erupts On Twitter As Facebook, Instagram Experience Outages
Reverend Jon Brooks, head of a local housing crisis centre, told Daily Mail Australia the family lived "as rough as it gets".
The detective said police would now be "digging into the background" of the couple.
'I wasn't aware they'd been living in a humpy - the last I knew they were moving from toilet blocks, to parks, to even under bridges'. We also provided them meals at lunch time'.
Police say a 35-year-old woman and 37-year-old man are assisting with inquiries following the death of a 4-month-old girl in Logan, south of Brisbane. "They can wander through Surfers and they're not really going to stand out like a sore toe".
"Clearly it (the body) had been in water, although I don't know how long for", Detective Inspector Marc Hogan told reporters today.
"This is a very tragic event".More news: Trump’s Finland fire claim sparks ‘rake news’ reports in Nordic nation
Emergency workers were called to an unresponsive infant at Staghorn Avenue, the Esplanade.
"I personally couldn't see any (injuries) of note but that will come out later in the day", Detective Insp Hogan said.
"We do our absolute best to keep those children safe", she said.
He said the baby did not have any obvious injuries and a ground and air search of the beach yielded little evidence. Insp Hogan said the child was found less than a kilometre from the main party precinct for schoolies revellers.
More than 13,000 teenagers attended the first night of festivities on Saturday night with 22,000 graduates expected to be part of the end-of-year event.More news: Marvin Lewis offers caution on running QBs