Saffie Rose Roussos was attending the concert with her mother, Lisa, and her sister Ashlee Bromwich, aged in her 20s.
The Telegraph reports Saffie became separated from her family during the attack. Her mother Lisa is believed to be in a coma and does not know her daughter has died, while her sister Ashlee is recovering in a separate hospital from injuries she sustained during the explosion.
In a statement released after Saffie's death was confirmed, Chris Upton, the headteacher at Tarleton Community Primary School where she was a student, said the news was "heartbreaking".
"Saffie was simply a beautiful little girl in every aspect of the word. She was loved by everyone and her warmth and kindness will be remembered fondly. Saffie was quiet and unassuming with a creative flair," he said.
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"News of Saffie's death in this appalling attack has come as a tremendous shock to all of us and I would like to send our deepest condolences to all of her family and friends.
"The thought that anyone could go out to a concert and not come home is heartbreaking."
The family's neighbour and family friend Salman Patel told the Daily Mail he understands Saffie's mother is unaware she had passed and that her dad had no idea the horror he would be met with when he went to pick his family up from the concert Monday night.
"He went to pick them up and arrived to find his wife in a critical condition, his elder daughter injured and his younger daughter lost," Patel said.
In the hours after the bombing, Saffie's friends and family flooded Facebook with appeals to find the missing eight-year-old.
"Saffie-Rose, 8 years old is still missing. Her mum Lisa and sister Ash are in hospital with shrapnel injuries which are not life threatening but Saffie is still missing," Hannah Melling wrote.
"Please could you share this post and help find her...please contact me with ANY INFORMATION.”
A third victim, a 26-year-old man named John Atkinson, has also been named, with friends sharing heartfelt tributes on social media, the Manchester Evening News reports.
"Thinking of all the Atkinsons at this very sad time John Atkinson you turned into an amazing young man so kind and thoughtful you will be missed by everyone," Tracey Crolla wrote on Facebook.
"Just heard one of my good friends whom I’ve known since he was a little boy passed away last night. Condolences to his family and friends. RIP John Atkinson," wrote Nana Julie Mills.
It's believed an estimated 21,000 people - many of them young children and teenagers - were attending the concert when a bomb exploded in the foyer of the building around 10:30pm.
22 people are confirmed dead, with 59 others injured. David Ratcliffe, the medical director of North West ambulance service, confirmed 12 of those seriously injured are children under the age of 16.
18-year-old Georgina Callander was the first victim of the attack to be identified.
According to reports, Callander was one of the first to be rushed to hospital following the blast and died at the hospital with her mum by her side.
Callander was a big-time Grande fan, tweeting that she was "so excited" to see her favourite artist live before attending the concert on Monday night.
Many of those who attended the concert - including children - are still missing. Searches have been complicated by fake accounts using stolen images of children who were not involved in the tragedy online.
Greater Manchester police have told people who need help or assistance to go to Etihad Stadium or to call the emergency phone number (0800 096 0095) set up to help people.
If you'd like to support the victims of the attack and their families, you can donate to the Manchester attack victims fund here.