Authorities are also attempting to locate a possible witness to the crime.
It happened at the location on the unit block of Chestnut Street.
New Castle County police told Action News that the victim was under the age of 12.
"The crime that's being alleged right now, is a sexual assault against a child under the age of 12," said Sergeant Andrea Botterbusch with New Castle County police.
Authorities say they have been combing the area, searching for the person accused of sexual assault.
"We know that it occurred at the bathhouse on the YMCA property by the pool house," said Botterbusch. "It came in as a 911 call from somebody on the scene."
Police released surveillance images of the suspect entering the building.
Investigators also released images of a possible witness who was caught on surveillance cameras. He is described as being bald and was seen wearing gray shorts without a shirt.
In the surveillance image, the suspect wanted in this case is pictured on the left, according to authorities.
In the new image the suspect is wearing a change of clothing, investigators say.
Authorities say the YMCA has let parents know about the situation.
"I know they sent out an email to all the parents with their safety protocols and they're cooperating fully with us through the investigation," said Botterbusch.
YMCA Sr. Director of Marketing and Communications Julie Burns sent the following statement to Action News on the incident:
"We are deeply troubled and saddened by the incident that occurred at the Hanby Outdoor Center last night. Our thoughts and prayers go out to the family and child affected. The safety and well-being of our members and the community remain our highest priority, and we are fully cooperating with authorities as they continue their search and investigation."
YMCA officials also clarified that the alleged assault did not take place during summer camp hours.
Crime Stoppers has joined police by offering up to a $5,000 reward for any information leading to the identification and arrest of the pictured individual or information that leads to the arrest related to the sexual assault of a child.
Anyone with information is asked to contact the police immediately.