The toddler swept hundreds of metres down a storm water drain in Gordon on Saturday was frightened and crying when he was plucked from the water, witnesses involved in his rescue have said.
"He looked frightened at first and then he started crying," local resident, Michael Chandler, told media.
Mr Chandler's flatmate, Ali, had jumped into the flooded drain after the pair spotted what they initially thought was a football.
"Luckily she didn't have to go in far because the boy tried to swim to the ramp edge," he said.
Onlookers said the boy kept himself afloat by using strokes he had recently learnt at swim school.
The boy had been reported missing by his family and neighbours and friends were looking for him when he was spotted. It has been reported that the two-year-old suffers from autism and is attracted to water.
Emergency services arrived at Stace Place, near where he was rescued, shortly after the rescue and he was taken to hospital suffering hypothermia, scratches and bruising.
ACT ambulance officer Chris Barry said the boy had been swept over three ledges before coming to rest in a holding pool.
"He didn't realise the danger he was in; it would appear he was able to swim and to save himself."
Royal Life Saving of Australia ACT executive director, Cherry O'Connor, has renewed calls for community education about the dangers of Canberra's urban waterways.
"Stormwater drains have been integrated as features in some of our suburbs so they attract children rather than deter them," she said.