All perfect praise be to Allaah, The Lord of the worlds. I testify that there is none worthy of worship except Allaah and that Muhammad, sallallaahu ‘alayhi wa sallam, is His slave and Messenger.
The sister's daughter is permanently prohibited to her uncle, as underlined in the verse that reads (what means): {Prohibited to you (for marriage) are ... and your brother's daughters and your sister's daughters…} [Quran 4:23] The prohibition in this regard applies to the daughter of one's full sister and half-sister as well given the general indication of the verse.
Ar-Rawdh Al-Murbi‘ reads, "It is permanently prohibited for the man to marry his sister, whether that be his full-sister or half-sister on his father's side or on his mother's side. Allaah, The Exalted, says (what means): {Prohibited to you (for marriage) are ... your sisters…} [Quran 4:23] It is also permanently prohibited for the man to marry the daughter of his sister (full-sister and half-sister alike) under any circumstances."
Allaah knows best.