Officials said the child was in her grandfather's arms when he lost his grip.
The toddler had been traveling with her parents, two siblings, and both her maternal and paternal grandparents at the time of the incident.
According to authorities, the girl was from IN and vacationing with her parents and grandparents.
The family of the girl are believed to be from Indiana.
Police have also identified the girl's father as South Bend police officer Alan Wiegand. The department tweeted out their condolences stating that they were thinking of Officer Alan Wiegand and his family at this time.
According to Cruisemapper.com, this week's voyage is scheduled to stop at St. Maarten, St. Kitts, Antigua, St. Lucia and Barbados, before returning to Puerto Rico.
Horrified passengers said they had heard a "cry of pain" from the girl's mother. They are now interviewing passengers and watching the ship's CCTV. "A cry of pain of that nature doesn't compare with any other cry".
According to local outlet Primera Hora, the girl was from IN in the United States and was vacationing with her parents, younger brother and paternal grandparents at the time.
Police are now conducting an investigation and are reviewing CCTV of the cruise ship, as well as interviewing other passengers who witnessed the incident at the time.