The boy was pulled out of the water at Swannies Lane, off Razorbill Way in Harden, by police officers just after midday on Friday but died shortly after arriving in hospital.
His death is not being treated as suspicious.
A spokesperson for West Midlands Police said: "A child has tragically died after falling into a canal in Bloxwich earlier today.
"We were alerted to the four-year-old boy being in the water, off Razorbill Way, at around 12.15pm.
"He was pulled out of the canal by police officers and despite efforts to revive him he was confirmed dead shortly after arriving at hospital.
"There are no suspicious circumstances and our thoughts are with his family, and the rest of the community, at this deeply distressing time."
A corner of Razorbill Way next to a children's play area was cordoned off by police until around 6pm on Friday as officers photographed the area.
The incident happened in a section of the Wyrley and Essington Canal.
Children were back playing in the nearby area by the evening, while nearby residents were left in shock.
One nearby resident, who asked to not be named, said: “What do you say? It is awful and heartbreaking.
“I have nothing to add, I am terrified it may be someone I know.”
A spokesperson for West Midlands Ambulance Service said: “We were called at 12.16pm to reports of an incident in the water off Razorbill Way, Walsall.
"Two ambulances, two paramedic officers a Critical Care Car from Midlands Air Ambulance and the Midlands Air Ambulance from Cosford attended the scene.
"Upon arrival we found a child in a critical condition. He received treatment from ambulance staff on scene. He was conveyed to Birmingham Children's Hospital for further treatment.”