Photo shows baby's mother Analia Bouter
The parents of the girl, who was born three months premature, say they found she was still breathing when they went to the local morgue to say goodbye.
Analia Bouter said she never got a chance to look at her baby after the birth because she had been sedated by staff at the hospital in Chaco, northern Argentina
"At the time of birth I don't remember much because I was put to sleep," she said.
"Rather, they never showed me the baby."
Mother-of-five Analia Bouter said she was sedated at the hospital
Born at 10.24am, the infant was taken directly to the morgue after apparently being declared dead.
Mrs Bouter and her husband, Fabian Veron, later visited the morgue where they say they forced open the tiny coffin to look at their daughter.
"The baby was there and they put the little casket on a stretcher. We looked for a bar to prise it open. The casket was nailed shut," Mr Veron said.
"I started to prise, took a deep breath and took the top off. My wife was the first one to look at the body and she uncovered it slowly.
"She saw the little hand and then uncovered the face. That's when it let the first little cry out.
"My wife jumped back, like saying, 'This must be my imagination'."
The baby girl, born a week ago, was reported to be in stable condition on Tuesday.
The parents had originally planned on naming her Liliana Abigail but have instead called her Luz Milagros - which means Miracle's Light.
"I went back to look again and she was moving. So I started to uncover the face and it was like she was just getting up, waking up," Mr Veron said.
"And that's when the lady from the morgue grabbed her and brought her."
Little Luz Milagros is the couple's fifth child. Provincial health officials have confirmed they are investigating the incident.