Vancouver Island Health Authority has suspended the licence of Lynette Johner, who operates Lynette's Family Day Care.
A passing motorist found the two-and-a-half-year-old child walking in the 3000 block of Haida Drive in Colwood on a and returned him to the daycare uninjured, the health authority said.
The daycare is at 640 Tanu Place.
Health authority spokesman Eric Berndt cited immediate health and safety risks as its reasons for suspending the daycare's licence.
The province's Ministry of Children and Family Development is also investigating the incident.
The suspension took effect on Sunday and will remain in place until the medical health officer completes an investigation.
MAP: Distance from daycare to where toddler was found