The Britain-based watchdog identified the children as aged seven, nine and 11 and said they were killed in a strike on the village of Abu Taltal near the rebel-held town of Al-Bab.
In a video released by activists, the bodies of the three children, a boy and two small girls, can be seen lying on blankets on a hospital bed.
Their brightly colored clothes are stained with blood and their faces are turned away from the camera.
The authenticity of the footage could not be immediately verified.
The Local Coordination Committees, a network of opposition activists on the ground, identified the victims as members of the Hazrouni family from Abu Taltal village.
The Observatory has previously reported more than 3,500 child deaths in Syria’s 22-month conflict.
In Syria’s second city Aleppo, several mortar rounds on Wednesday hit the districts of Aqwil in the center and Marjeh in the south, the Observatory said.
The watchdog also reported fierce fighting overnight on the outskirts of Yarmuk Palestinian refugee camp in southern Damascus.
On the edge of the capital, loyalist troops bombed the town of Douma to the northeast as clashes erupted around a military vehicle depot between the nearby towns of Irbin and Harasta.
In Ras al-Ain in the Kurdish northeast, battles raged between Kurdish militia and Islamist rebels, the Observatory said, adding that more than 58 people have been killed in a week of fierce fighting there.
The main opposition Syrian National Coalition, which has been recognized by dozens of states and organizations as the sole legitimate representative of the Syrian people, said it has contacted rebel leaders in the area, urging them to stop the fighting.
The Observatory relies on a nationwide network of activists and medics in civilian and military hospitals to compile its tolls. It said 123 people were killed on Tuesday: 62 civilians, 27 troops, 32 rebels and two Kurdish fighters.
Among the dead were 15 children.