The child, identified as Krishna Kumari, was reported missing last night after attending a religious event at Sidhartha Road.
Investigations were launched and the body of the child was found in a canal opposite a house in Narahempita this morning.
The body was recovered by navy divers, the police media unit said.
A 16 year old boy and an 18 year old youth who live next to the house of the victim were later arrested by the police.
On being questioned it was revealed that the child was raped and then dumped into the canal.
Further investigations are underway.