The 21-year-old woman was arrested in Busto Arsizio, Lombardy, after authorities discovered she was planning to flee Italy to her native Albania, Rai News reported.
The woman was seven months pregnant when she gave birth on 25th April, in what was first thought to be a miscarriage.
But autopsy results showed that the baby girl was alive when she was born and was drowned, in addition to suffering from head injuries, Rai News said.
Her mother reportedly told authorities that she was in serious pain for a few minutes before having a miscarriage, although police believe the woman took a drug to induce an abortion.
After being arrested she was taken to prison in Monza, where she is due to be questioned this week.