A precautionary notice is being placed on a small free-range poultry farm after a number of hens died, the Ministry for Primary Industries says.
Meanwhile, the culling of 80,000 birds at the centre of the bird flu outbreak has started at Mainland Poultry, a commercial egg farm in rural Otago.
Movement of material on and off the second farm which is near Dunedin has been halted from Wednesday.
"As is normal in biosecurity responses we always investigate where illness is identified," Biosecurity New Zealand deputy director-general Stuart Anderson said.
"The property has around 6000 birds, with a number of deaths, and testing is under way."
The property was not owned by Mainland Poultry, and MPI was trying to establish if there were any links between the two.
MPI has confirmed the second farm under investigation is not part of the initial six farms that were identified as having a potential risk of infection.
In a bid to stamp out the high pathogenic strain of avian influenza, H7N6, Biosecurity New Zealand has begun the culling of birds at the first farm.
"Work started this morning to humanely cull hens in two sheds on a farm managed by Mainland Poultry where testing confirmed cases of an H7N6 subtype of avian influenza in birds," Anderson said.
The cull was expected to take two to three days, using the industry standard practice of CO2 containerised gas, which farms regularly use to euthanise fowl.
The carcasses would be transported to a secure landfill in Southland.
"It's important to point out the landfill has specific features to prevent the leaching of materials into the environment, including impermeable layers, and a process of routine monitoring," Anderson said.
"The disposal will be in a deep pit and in an area well away from any public access, and the landfill will be closed during this process."
He said testing was continuing at Mainland Poultry and other poultry farms in the area.
"There had been no reports of concern about other ill or dead birds on other poultry farms.
"Contract tracing has revealed limited movements between Mainland Poultry's affected farm and some of the other poultry farms in the area."
Biosecurity New Zealand will be increasing its presence on the ground in Otago and has set up a regional control centre today to manage the situation.
More than 100 MPI staff, including frontline biosecurity staff, veterinarians and food safety staff were contributing to the response.
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