Law of our land prohibits employment under 18 years of age. Hence, your employer is justified in terminating her services.
But this situation has to be handled carefully so as not to break the confidence of someone who is just entering or will enter the corporate world.
She must be clearly told that due to an oversight this appointment has happened, which is illegal, and that she can be on board only when he completes 18 years of age. See her off in good humour. And yes, remove all traces of this appointment from your official records.
Prashant