Police say the driver, whose actions they called heroic, pulled the girl from the burning car.
Phillipa Jane Manning (43) and her daughter, Rebecca Katherine Coulter (6), both of Waihola, died at the scene.
The Mazda station wagon in which they were travelling and a northbound Mainfreight truck-and-trailer unit collided, 4km south of Milton on State Highway 1, at 9.35pm on Tuesday.
Abigail Coulter, who turned 3 yesterday, was in a stable condition in Dunedin Hospital and "progressing favourably", a spokeswoman said.
The truck driver, travelling north, witnessed a large fireball in the distance.
Arriving at the scene, he stopped and pulled the girl from the burning vehicle.
"It is something anyone would do," the experienced Invercargill driver told the Otago Daily Times through a Northern Southland Transport company representative.
The reluctant hero declined to be named, and late yesterday was yet to speak to police about the accident after completing a night shift.
Senior Sergeant Richard Whitmore, of Balclutha, said the actions of the passing truck driver were "heroic".
"His actions saved the life of that [little] girl."
The commercial vehicle investigation unit and a serious crash investigator, both of Dunedin, and Balclutha police were investigating the crash, with a cause yet to be determined, he said.
A diversion was lifted at 4am yesterday, but speed restrictions remained in place.
Milton Chief Fire Officer Alan Tapp said the scene was one of "bloody carnage", and the crash was one of the worst he had witnessed in 40 years as a volunteer firefighter.
Firefighters doused flames from the front of the car, later helping to extract the two bodies.
Abigail was semi-conscious during the ordeal, and was airlifted to Dunedin Hospital.
Mainfreight group managing director Don Braid said the transport company and the experienced Invercargill-based driver were "devastated by the accident".
Thoughts were with the family, and the company would do whatever it could to assist if that was wanted.
The new Kenworth truck was likely to be "written off" as a result of the accident, he said.
