The father, alleged to be possessed, bit the girl on her neck, ate the flesh then sucked her blood.
Police described the incident as act of cannibalism by the father, who hails from Finschhafen District of Morobe Province.
The father, named as Rex Eric, was arrested by police and was detained awaiting charges.
According to police, he would be charged for willful murder and cannibalism after an investigation is complete.
Ahi Local Level Government ward nine councillor John Kenny, who was first to attend to the scene, said the incident happened around 4pm on Wednesday.
Mr Kenny said the mother and the child came to visit the father at the Arnotts compound when the incident happened.
He also claim the father took the baby from the mother, jumped the fence and ran towards the nearby Hunter settlement and into the bushes to perform his act.
Mr Kenny said the father held the baby close to him, bit deep into her neck, ate the flesh sucked the blood. Two boys who were climbing a coconut tree nearby saw him and ran quickly to the settlement to alert the people.
"He was just laughing at the boys and continued eating the flesh and sucking the blood," Mr Kenny said.
The boys were scared and ran quickly to alert the people.
He said the boys from the settlement went to the scene to investigate when the suspect dumped the body in the bushes and ran away towards the Martin Luther Seminary, from where he was apprehended and handed to police. [PostCourier]