David Swann had just been for a walk in Seatoun and was driving back towards the tunnel when he spotted the girl.
A car was stopped in the tunnel's entrance with a woman waving out the window and a truck was about to enter a junction just before the tunnel, he said.
"The truck driver was looking really scared and so it was just a weird situation and all of a sudden I saw this toddler in the tunnel and she was waving a bit of paper."
Swann said it seemed like the child had been chasing the paper down the road.
Next thing a woman from the street ran in front of the car and scooped the child up.
"She then disappeared off down the road no doubt utterly shocked at how easy it is to lose track of toddlers."
"Thank goodness there wasn't a car coming fast the other way because it's just in that transition between dark and light as you're getting your eyes adjusted to coming out of the tunnel and that toddler would have been invisible."