Describing the investigation as "very complex", Acting Inspector Rebecca Olsen said the mother and her partner were assisting police. An autopsy was being conducted, and crime scene investigators remained at the property, she said.

Acting Inspector Olsen would not, however, comment about potential suspects. Homicide detectives have been investigating since Tuesday afternoon.

It is believed Nikki Francis-Coslovich's body was found in the roof cavity of her single-storey home.

"All the family members are really quite shattered by the events and we're still in the early stages of actually establishing what happened," she said.

"So there's still a lot more information gathering that needs to go on. This is going to be a very complex investigation and they're going to be working very hard to resolve this."

The girl's father Nicholas Coslovich told Fairfax Media he was heartbroken. Nikki was the youngest of four girls, all aged under eight.

The girls had all lived with their mother, Peta-Ann Francis who told police she last saw Nikki when she put her down for a nap about noon. When she went to check on her about three hours later, Nikki was not in bed.

"She was the kind of little girl that would walk into a room and light it up," Mr Coslovich said.

"If someone was feeling down or having a bad day she'd give them a big hug and everything would be OK. It's the purest little life to take away.

"I'm going to miss the heck out of her."

When Nikki went missing, it seemed like all of Mildura came out to search for her.

Nearly 200 people from the Victorian border town rallied - jumping in their cars and also searching on foot - after police released a photo of the missing toddler.

Police first believed the two-year-old girl had wandered from her home and on Tuesday afternoon released images of the child to the media and the public in an attempt to help find her.

Then, nearly two hours later, the town's fears were confirmed.

The body of the curly-blonde-haired girl was found at her home in Oram Court.

"In a subsequent extensive search of the area … we've located a deceased 2½-year-old," said Detective Senior Sergeant Scott Anderson of the Mildura crime investigation unit.

Nikki was reported missing by her mother. Fairfax Media has been told that the last independent sighting of the toddler was the day before, on Monday, by a neighbour.

Mr Coslovich and the girls' mother were together for seven years, before separating in February. The mother had started a relationship with another man in the same street since then.

On Wednesday morning, Mr Coslovich had not been told where Nikki was found, or whether there was any sign of how she died.

Her young sisters had not been told that she had died.

Neighbour Rebecca Fotheringhan was among those who joined the search for Nikki.

"I drove around looking for her … but we sort of knew something was amiss," she told the Sunraysia Daily.

"It's heartbreaking, the kids used to play in the street."

Police had said Nikki was known to enjoy the walk to Mildura CBD shops and Mildura Centro shopping centre with her mother. She was last seen wearing a black long-sleeve top with coloured flowers, and blue and white striped leggings.

The brick-veneer house where she was found is like most others in the cul de sac.

Other neighbours were shocked by the tragic news in the usually quiet street.

They said Nikki was a happy child, who often played with other children in the street.

"My kids used to play with her," neighbour Heather Miller told the Sunraysia Daily.

"She was happy, always playing with her doll. The older girl was always polite and used her manners.

"You get your rough nights here every now and then but it's quiet more than anything. It's terrible. I'm letting the kids stay home from school tomorrow, it's too close to home."

UPDATED - Mildura toddler found dead http://t.co/Xawt0LbrZK pic.twitter.com/Ohvp1OJOG8— Sunraysia Daily (@sunraysiadaily) August 25, 2015

UPDATE: Missing two-year-old girl found dead inside a Mildura home: http://t.co/pGClYbUuHV #9News pic.twitter.com/rbOxjC3KCa— Nine News Melbourne (@9NewsMelb) August 25, 2015

- with Liam Mannix