New Jersey State Police said the girl fell off the ride at about 6 p.m.
According to a witness, the girl fell off the "Xtreme" ride.
The witness said the child was motionless at the scene and was taken by medical helicopter to the hospital.
"I have a seven year old and just seeing the little girl it's so heartbreaking," said Jessica Estrada Plasencia. "You would think your kids would be safe...I know you ride at your own risk, but they are there to make sure your kids are secure, to make sure kids aren't going to fall off a ride."
Witnesses said family members of the child appeared to be distraught.
Many families demanded that the fair be shut down for the evening after the incident.
According to the website for the event, the amusement rides and games area would be closed on Sunday and all other scheduled events at the festival would continue as planned.
The girl was taken to Cooper University Health Care following the incident. But shortly after her arrival there the girl was pronounced dead.
State police haven't said who's at fault.
The company that owns and operates the ride is Skelly's Amusement Company. An inspector came to inspect every ride Sunday morning to ensure safety they never opened.
"Even though we have been given permission to operate the other rides by the state, we don't have it in our heart. We continue to ask for your thoughts and prayers for the family," said a statement on the company's Facebook page.