The Hendra virus is carried by native fruit bats. It is capable of being passed on to horses, and humans can catch the disease from horses.
The transfer to horses is most common during the bat breeding season.
Queensland chief veterinary officer, Dr Rick Symons said a private vet had attended a sick horse on the property on Saturday but it had died on Sunday. The horse had been moved to a nearby second property where it died.
"The vet took blood samples to test for Hendra virus," Dr Symons said.
"The sample results came back last night as positive and we immediately began implementing control procedures.
"There are other horses on the properties and Biosecurity Queensland are in the process of quarantining these animals."
He said Biosecurity Queensland staff will be on site today and will be speaking to residents in the immediate area to provide the latest information about Hendra virus.
Doctors from Queensland Health's Gold Coast Public Health Unit are on their way to the property now to assess the situation and offer any testing or treatment to people that may be required.
At this stage it is not clear whether any human is at risk, however more will be known once they are on site.
Symons said there is a greater awareness amongst vets and horse owners of the risks associated with Hendra virus.
"We encourage vets, horse owners and the community to be vigilant and report any suspected cases of Hendra virus to Biosecurity Queensland and most importantly, to take appropriate precautions when handling any sick horse."
The latest case is the 15th known incident of Hendra virus infection since 1994. The virus has claimed 30 horses and four people since it was first identified in a racing stable in 1994, with the last two fatalities being veterinarians. A further three people have contracted the virus but survived.
In recent past cases, people potentially exposed to the virus have been offered experimental anti-viral drugs to reduce the risk of infection.
A vaccine for horses is under development, with a breakthrough reported in the research this year, but a commercial form is still several years away.
Hendra, named after the Brisbane suburb where the first cases were identified, has only ever been noted in the states of Queensland and New South Wales.