"Obviously, she's only three and she can't communicate well," Williams told ABC News. "But I didn't expect him to sign back to her. When he started communicating with her it was a beautiful moment."
Santa, asking that his real name not be used, told ABC News he had no problem finding out what was on Mali's Christmas list.
"She said she wanted a scooter and I asked if she wanted a dolly and she said she wanted some sweets," Santa said. "She wasn't communicating and I looked at her mom and she said she understands animals. I decided to go in and try my very best. I'm not the best signer in the world, but I think that every child should be given attention."
Williams said Mali is not deaf, but doctors think "she may have a mental delay."
"It's been over the last year that we've noticed," Williams said. "She'll get there; she's just a little bit behind with speech."
Mali and Santa's brief chat made onlookers cry, according to mall manager Graeme Skillen.
"It was just one of those moments where the magic of Christmas just affected everybody," Skillen told ABC News. "I was emotional, our security staff was emotional, the young child's mother was emotional."
The manager said a crowd of about 500 shoppers and staff were so quiet during the pair's exchange that it felt as if time stood still. Skillen said Williams was apprehensive for Mali to meet Father Christmas.
"The mother was crying because she said it was the first time her daughter saw Santa and she was very, very nervous for her to see Santa with her disability," Skillen said. "But [the girl] was beaming when she got off the stage."
The signing Santa works at a special needs school when he isn't at the mall. Skilled said Santa's signing skills made him an ideal Father Christmas.
"He's been here for four years, but this was the first time this happened," Skillen said.
While Santa said he will continue to use "every available tool" to spread Christmas cheer to the children who visit him, Williams said Mali can't wait until next year to see him again.