The toy was collected on the first day of a new four-week search near William's foster grandmother's home in Kendall, on the New South Wales mid-north coast, along with bags of other evidence.
ABC News reported forensic experts are involved in the new search, but it is too early to determine whether the toy found is linked to William's 2014 disappearance.
In a press conference held yesterday, police urged William's kidnapper to 'come to us before we come to you.'
Detective Chief Inspector Gary Jubelin issued a stern warning to people with information and said although police hold 'grave fears' for the boy, 'the possibility that he is still alive' was being considered.
He told reporters, 'If you do have information concerning what happened to William, you are at risk of committing a criminal offence if you do not come forward. I'd suggest you come to us before we come to you.'
Detective Jubelin also reiterated the NSW government's $1million reward for information leading to William's recovery.
It's believed the evidence being gathered by over 50 officers is expected to be used in criminal court or coronial inquest.
William's foster family have never given up hope of finding the missing boy, and on Wednesday posted a touching message to social media.
'Today marks 1370 heartbreaking days since William disappeared,' the post read.
'William's loved ones are, and will forever be indebted to the tremendous ongoing commitment of NSW Police; in particular, Strike Force Rosann who have been absolutely relentless in their ongoing investigation in the search.
'Since that tragic day on Friday 12 September 2014, hearts across Australia have been broken, but we have and will continue to maintain unwavering faith in NSW Police and carry hope in our hearts that William will be found.
'He is in our hearts always...Always.'
Anyone with information is urged to call Crime Stoppers 1800 333 000 or use the Crime Stoppers online reporting page.
This article originally appeared on New Idea.