The Hendra horse toll has climbed to 21 in New South and Queensland since June, following confirmation that a death on Sunday was caused by the disease.
The death on a property north of Ballina, on the New South Wales North Coast, takes that state's toll to 10. Eleven have died in Queensland, as well as a family dog which was euthanised after testing positive to the virus.
The New South Wales NSW Department of Primary Industries says the property at the centre of the latest case has been quarantined and the dead horse buried.
"The horse was noticeably ill on Saturday and was showing neurological changes, including weakness and loss of balance," the state's chief veterinary officer, Dr Ian Roth.
The horse deteriorated rapidly during the day and was found dead on Sunday morning.
A private veterinarian took blood and swabs from the horse and sent the sample to the Elizabeth Macarthur Agricultural Institute for laboratory analysis, he said. Results confirmed the Hendra virus on Monday night.
"While there are no other horses on the property, a dog on the property will be assessed by the Livestock Health and Pest Authority in line with New South Wale's companion animal policy.
"The infected horse was grazing in a small paddock containing flowering and fruiting trees, where flying foxes [fruit bats] were active."
Hendra virus can spread from flying foxes to horses and, rarely, from horses to people.
"It's critical that people keep horses away from fruiting and flowering trees that might attract fruit bats," Roth said.
"Horse owners need to maintain vigilance against this virus."
A total of five properties in the state remained under quarantines as a result of Hendra cases.
In all, eight properties have had confirmed cases in the state since June - Wollongbar, Macksville, Lismore, Ballina, South Ballina, two properties at Mullumbimby, and North Ballina.
Quarantine measures have been lifted at the Wollongbar, Macksville and Lismore properties.