The three-judge court today imposed a 16-month sentence on 64-year-old Senan O'Flaherty but suspended the entire term on condition that he be of good behaviour for two years.
The court found that the trial judge was wrong to place O'Flaherty's culpability at the lower end of the scale with Ms Justice Isobel Kennedy saying he was at the "upper end" and that his blameworthiness was more significant than that identified by the judge.
She said that in the lead up to the tragic accident, which took the life of three-year-old Estlin Wall and caused serious injuries to her father Vincent Wall, witnesses saw "unusual features" in O'Flaherty's driving.
The court upheld the €1,500 fine and a four-year driving ban.
Mr Justice George Birmingham, presiding, with Ms Justice Kennedy and Mr Justice Patrick McCarthy, said he would like to express the court's sympathies with the Wall family on "the loss of a greatly, greatly loved daughter."
Estlin was just days away from her fourth birthday when she was killed in an accident on March 15, 2017 on the N85 between Inagh and Ennistimon.
Arising from the crash Senan O'Flaherty (64) of Lower Gowerhass, Cooraclare, Co Clare, pleaded guilty at the Circuit Criminal Court to careless driving causing death and careless driving causing serious bodily harm.
At a sentence hearing last year Judge Gerald Keys fined O'Flaherty €750 in respect of each charge and banned him from driving for four years, the shortest ban allowed under the statute.
Judge Keys said O'Flaherty had a "low culpability" in causing the tragedy.
At a hearing yesterday Shane Costelloe SC for the DPP asked the Court of Appeal to impose a custodial sentence to act as a deterrent.
Outlining the facts, he said O'Flaherty was driving his heavy goods vehicle behind a bus which was accelerating and slowing down "erratically".
He said that O'Flaherty may have become frustrated by the continuously changing speed and was seen by witnesses in cars behind him driving "right up behind the bus".
Counsel submitted that at the first point on the road where it was legal to overtake, O'Flaherty crossed over the median line either to overtake or to see if it would be possible to overtake.
By crossing the line, counsel said, he caused Mr Wall to take evasive action.
Mr Wall lost control of his Skoda Fabia which did a 360 degree turn and was in collision with an oncoming car that had been driving behind O'Flaherty's truck.
Mr Wall's daughter, who was in the back seat strapped into a baby seat, suffered catastrophic injuries and died.
Mr Costelloe said the sentencing judge had erred by accepting a statement by O'Flaherty that he only crossed the median line because he saw the bus crossing it and thought there might be a pedestrian or cyclist on the left side of the road.
Counsel said the judge had found that the only error committed by O'Flaherty was in driving too close to the rear of the bus.
Ms Justice Kennedy said that none of the witnesses saw anything on the left side of the road which would have caused O'Flaherty to pull out and all were of the opinion that he pulled out to see if it would be possible to overtake.
She said it was surprising that O'Flaherty, who knew the road well, would have attempted to overtake a bus at that point in the road.
She said the court was persuaded that the trial judge was in error in placing the truck driver's responsibility at the lowest end of the scale and said the penalty imposed was a substantial departure from the appropriate sentence.
Mr O'Flaherty, who was watching proceedings from his solicitor's office, entered into the bond to be of good behaviour for two years.
He has already paid the €1,500 fine.