About 1,600 chickens contracted the virus and died during the weekend at a farm in Nyaunghnapin, about 25 miles north of Yangon, Myanmar's largest city, said Tang Zang Ping, the Myanmar representative for the United Nations' Food and Agriculture Organization.
Authorities slaughtered the farm's remaining 20,700 birds as a precautionary measure, he said.
"We need to impose stricter control on the movement of poultry, poultry products, chicken feed, eggs and even the trucks that carry these materials," Tang told The Associated Press.
The Livestock Breeding and Veterinary Department said in a statement that the virus might have spread in the farm, located in Hmawyby township, through contaminated trays used to carry eggs or small birds, the New Light of Myanmar reported Wednesday.
The statement said chickens, ducks and quails within a 0.6-mile radius of the farm were being monitored and that authorities imposed a ban on the sale and transport of fowl within 4 miles of the outbreak.
But authorities conceded that the measures might not be enough to control the disease.
"Despite preparedness and designating restricted zones and controlled zones, there can be more bird flu outbreaks in other regions," the paper quoted the livestock department as saying.
Myanmar has reported two H5N1 outbreaks in recent weeks among poultry at two farms on the outskirts of Yangon. Until the recent cases, Myanmar last reported an H5N1 outbreak among poultry in March 2006. It has reported no human H5N1 cases.
The disease has killed at least 169 people worldwide since it began ravaging Asian poultry farms in late 2003, according to the World Health Organization.