The compensation payment was ordered by a federal jury in Albuquerque in New Mexico after it ruled that the car, a 2001 S60 model, had been defective.
The jury had listened to two weeks of testimony before reaching an agreement on the damages, following a long legal battle first launched in 2012 by the baby's father, named by US media as Andres Rivera.
It heard that the girl – called Alana – had suffered permanent brain damage after accidentally activating an electric window and getting her neck trapped in it, preventing oxygen from reaching her brain. Her injuries were so severe that she will never be able to live independently.
The jurers were told that the baby was hurt while her father was taking nap, following a stressful day at work. He had previously released her from her car seat. A passerby saw the lifeless girl hanging out of the window and banged on the car to wake him up and alert him to her distress, before calling the authorities.
Volvo has always maintained that the accident was Andres Rivera's fault. However the firm, which first launched in west Sweden in 1927, later changed the design of its electric windows, without recalling earlier models.
The Albuquerque federal jury suggested that the father should take 30 percent of the responsibility for the girl's injuries, with Volvo judged to be 70 percent at fault.
According to local newspaper the Albuquerque Journal, Alana spent a month in hospital after the accident and has since undergone intensive medical treatment and physiotherapy.
She was well-adjusted enough to start kindergarten in 2014, the paper reported, but still struggles with her speech.
James Ragan, the family's lawyer, told the newspaper that he was impressed by the girl's parents, who had previously lost another child to brain cancer.
“I’ve been amazed at their ability to weather difficulties and be a family,” he said. “I’m astounded at their ability to carry on.”
Neither Volvo headquarters nor lawyers for the company immediately made a statement following the hearing.