The girl, a year seven student from Thomastown in Melbourne, was in the Iraqi capital with her family to visit her sick grandfather.
The foreign affairs minister, Julie Bishop, identified her as Zynab Al Harbiya, and said the Australian government was providing consular support to her family in Baghdad.
She was reportedly at the counter of al-Faqma ice-cream parlour when a suicide car bomb exploded outside just before midnight local time, killing 17 people and wounding up to 32.
Zynab’s funeral will be held on Wednesday, according to Sky News.
She attended the Broadmeadows campus of Sirius College, a majority Muslim school.
In a statement, the executive principal, Halid Serdar Takimoglu, said the school had been rocked by the “devastating and shocking news”. He described Zynab as an energetic, passionate, outspoken and well-loved student.
“All of us are deeply distressed that one of our smiling students has been taken from us in a cruel act of violence that is beyond understanding,” he said.
“Our immediate concern is to support Zynab’s family here in Melbourne, her parents in Iraq, our students and our school community.”
Students at the school said prayers for Zynab on Wednesday morning and have been given access to counsellors.
A closed-circuit camera captured the moment of the blast, showing a busy avenue. A huge fireball engulfs a building, forcing cars to scramble to get away.
Other videos of the attack posted on social media show wounded and bloodied people crying for help on the footpath outside the ice-cream parlour.
In a second attack, an explosives-laden car exploded during rush hour near the state-run Public Pension Office in Baghdad’s busy Shawaka area, killing 14 people and wounding at least 37, a police officer said.
In separate online statements, ISIS claimed responsibility for the two attacks, saying its suicide bombers targeted gatherings of Shias.
The attacks came just days into the holy month of Ramadan, when Muslims fast during daylight hours.