Kebz Lisle posted a video on Facebook, demonstrating what the app looks like and how it works, and urged parents to pay close attention to the apps their children download.
In the video, the mum explains how even though the app - called 'Call Blaze and the Monster Machines'- looks harmless, it starts to play a chilling recording message when you start to use it.
The disturbing voice in the app says: 'Hi kids, I'm your new friend Happy Slappy, or whatever you want me to be called.
'You see I want to play with you kiddo, maybe we could perform some fun games together.
'What's this hogwash. You look afraid. Is it this knife in my whirly twirly hands? Making you a little nervous ha.
'That's all right 'cause this knife is gonna improve your look when it's sticking right out of you.'
Alongside the clip, the mum wrote: 'Guys please be careful what your children are downloading! I feel sick to my stomach!!! This says pegi 3 so children are able to download this! My daughter has been banned from all devices temporarily.
The mum, from Greater Manchester, goes on to say that she doesn't leave her child unsupervised with her phone and that she only stepped out to go in to the other room for a few seconds, which was when she heard the chilling voice.
'I feel like an awful mum right now 😢😢😢 I always supervise my child when she is downloading and the app itself looks innocent, I am not the person to blame, clearly it's the sick and twisted individual who posted this nonsensical bullshit!', she wrote.
She also added that after investigating the issue a bit more, she's found a few more apps that have the same scary messages.
The post, which has had more than 180k shares, has resonated with many parents, who commented to thank her for sharing and tagged friends and family.
After the incident, the mum reported the app to the police and has started a petition for Google Playstore to screen children's apps more closely.
The app has been suspended from Google Play and a spokesperson Google said: 'We have a set of policies designed to provide a great experience for users and developers and we act quickly to remove apps from Google Play that violate those policies.'