Cally Simpson, from Abroath, was aged just four when she was pulled unconscious from a swimming pool at a resort in Salou, Spain.
The youngster spent a year in Edinburgh’s Royal Hospital for Sick Children and then Ninewell’s Hospital in Dundee.
But despite doctors fearing she would be left brain dead, Cally defied the odds by waking up within months of the 2014 incident and later graduating from nursery.
It is understood wheelchair-bound Cally died after battling an illness in hospital, with her mother Kate Miller by her side.
A fundraiser has now been launched by Cally’s family to support “mum in a million” Kate.
The GoFundMe page has already raised more than £2,300 of its £2,500 target in just one day.
Launching the page, Rachel Cameron said: “I am trying to raise some money, to help my cousin financially get through her daughter’s funeral. Cally grew her angel wings all too soon.