Two-year-old Brielle Robinson passed away just after 11 a.m. Friday at the hospital.
Also killed in the crash was 5-year-old Rayvon Robinson.
Police say open containers of alcohol were found in the vehicle carrying the children, though investigators haven't said if alcohol played a role in the crash.
No charges have been filed, pending the result of further investigation.
The wreck happened around 1 a.m. Wednesday in the eastbound lanes of I-78 in Lower Saucon Township near the Hellertown interchange.
According to state police, a 2011 Nissan Versa, driven by 54-year-old Nadine Walton of Newark, New Jersey, veered from the left lane and onto the left shoulder.
The driver quickly over-corrected, crossing both lanes and hitting the right guard rail before ending up back in the left lane.
The Nissan was then struck by two oncoming cars, a Kia Forte and a Dodge Caravan, that were traveling in the left lane.
Police say all three passengers from the Nissan, including the two children, and 31-year-old Stefany Stephens, were thrown from the vehicle.
Rayvon was pronounced dead at the scene.
Walton was taken to Lehigh Valley Cedar Crest Hospital, along with the injured Nissan passengers.
The driver's injuries were described as serious.
The drivers of the Kia and Dodge vehicles were taken to area hospitals with injuries described as minor.
All lanes of I-78 East were shut down for nearly 11 hours between Route 412 and Route 33 as police investigated.