The incident was reported by the police in Luneburg, a town in the German state of Lower Saxony near the harbour city of Hamburg.
Local media wrote that the 23-year-old woman was attacked in the early evening hours in a park where she was taking a leisurely stroll with her small child, whose name and age were not mentioned in reports.
According to local media, two men suddenly grabbed her and her child from behind. While one of the attackers held the child, the other is said to have sexually assaulted the young woman with her child watching. A short time later, the men released the mother and child and ran away.
The woman immediately reported the sex attack to the police, who started a manhunt for the pair.
The incident was said to have taken place behind a duck pond in the town on October 1 at around 6.30pm.
According to local media, the perpetrators have been described being between 30 and 35 years of age and Mediterranean-looking in appearance. One of them had a full beard and was wearing a blue hoodie.
The police have started an official investigation and are asking for witnesses who were in the park at the time to come forward.