A fourth chicken farm has been hit by bird flu amid fears the disease could spread across Australia's poultry industry and egg supplies to consumers will become short. 

The contagious H7N3 variant of avian influenza was detected on Wednesday at a property at Lethbridge, in Victoria's southwest.

The virus is understood to have spread inside a sealed and climate-controlled shed that houses around 120,000 chickens. 

The latest outbreak of the disease comes after 80,000 free-range chickens at Farm Pride Foods, a property located 900metres away from the latest case, was affected by the virus over the weekend, according to the Geelong Advertiser.

The farm is located within an existing 5km-exclusion zone set up after the virus was detected at a nearby property in May. 

The disease was earlier detected last month at two farms in Meredith and Terang, in Victoria's west, with some 500,000 birds slaughtered to contain the spread of the virus.  

Avian influenza is a highly infectious disease for birds that can cause severe symptoms and death among poultry. 

Agriculture Victoria said in a statement yesterday that all four properties have been placed into quarantine.   

'All poultry will be safely disposed of. The sites will be cleaned and cleared of the infection,' it said. 

Restriction and control orders are in place in Meredith, Lethbridge and Terang to restrict the movement of poultry and poultry products. 

The order is also in place for vehicles and equipment on and off the properties in the designated areas. 

Agriculture Victoria said staff are working with affected business to contain and eradicate the disease. 

The outbreaks of the virus have struck the Golden Plains Shire, the main poultry-growing region in regional Victoria. 

There are more than 1.5million free-range, barn and caged hens, and around two million chicken meat birds on farms in the area. 

Farm Pride Foods said in a statement to the Australian Securities Exchange on Tuesday that around eight per cent of their total production output has been affected. 

'The Company will seek compensation from the Emergency Animal Disease Compensation Scheme arising from the disposal of these birds,' the company said. 

The outbreaks are expected to impact egg supply to consumers in coming weeks.

Danyel Cucinotta, the vice-president of the Victorian Farmers Federation, told The Guardian, 'We’re anticipating a flow-on impact to egg supplies in the coming week and are working as hard as possible to maintain availability'.

'My advice is to shop around at your local grocer, market or small independent store to buy your eggs.'

Despite concerns the virus could potentially be deadly to humans, health officials said the H7N3 variant of avian influenza is not a major health threat.

Agriculture Victoria states consumers should not worry about supermarket eggs and poultry products as they 'do not pose a risk and are safe to consume'.