Shortly before midnight, gardai were called to a farm in Ballydehob, West Cork after a note, believed to be a suicide note, was found.
"A search of the farmland and surrounding area was undertaken and the coastline was searched by the Valentia Coastguard," said a spokesperson.
Gardai immediately sealed off the beach area and alerted both the State Pathologist and the Garda Technical Bureau. Both bodies were removed to University Hospital Cork where Dr Margaret Bolster will perform a post mortem later today.
Gardai are treating the deaths as suspicious but the Herald understands that they believe the incident to be a tragic murder-suicide. Mr McCarthy worked as a farmer in the Foilnamuck area of Ballydehob. It is understood that he, his American wife Rebecca and their daughter Clarrisa were often seen together in Ballydehob.
"They always looked so contented," one local woman told the Herald today.
Locals expressed shock at the discovery and prayers were offered for the father and his little girl at early morning Masses in Ballydehob and Goleen.
Sources say that tragic Mr McCarthy suffered a "health scare" in recent months. "He was a hard working, industrious man who loved his family. No one in the community saw this coming. We are all shocked," the source said.
Neighbours spoke about the "sheer love" the man had for his child.
"They were often seen out together. He loved the child so much. We are just waking up to this news today and we are just numbed with shock," said Goleen council member Ellen Scully.
"This area has never experienced a shock of this scale before. Our hearts are broken for the man's wife, who is also well known to us."
Although such tragedies are rare, Ireland has a sad history of parents killing their children and then themselves.
One of the most shocking was the murder-suicide in Ballycotton, Cork over two years ago when Una Butler lost every member of her immediate family after her husband John killed their little girls Zoe (7) and Ella (2).
He bought a five-gallon drum of petrol and drove his car at speed into a ditch, causing it to burst into a ball of flames.
He killed his two daughters earlier in the morning of November 16, 2010 at their home. Christopher Crowley killed his daughter Deirdre almost two years after abducting her. He had collected Deirdre for his agreed overnight access but never brought her back to her mother's home in Cork.
Instead, he took Deirdre to a house in Clonmel and kept her there until, 21 months later, he was discovered. As two local gardai deliberated outside the house, he shot Deirdre in the face with a shotgun before turning it on himself.
The community of Monageer in Wexford was also left reeling in 2007 when Adrian Dunne and his wife Ciara picked out coffins for themselves and their two daughters Leanne (5) and Shania (3) in the days before they were found dead.
In May 2012, pregnant Anna Byrne (35) jumped from a cliff-top at Howth Summit near Dublin.