The duck farm was within a quarantine zone set up around other affected facilities and the government said its infection was not a surprise.
Authorities are trying to contain outbreaks of two strains of bird flu near Melbourne, an H7N3 strain on four poultry farms and the duck farm and an H7N9 type on a poultry farm about 130 kms (80 miles) to the southwest.
Neither strain is the H5N1 type that has infected billions of wild and farmed animals globally, upsetting food supply chains and raising fears of human transmission.
"Tests have confirmed the high pathogenicity H7N3 strain at a commercial duck farm," Victoria's agriculture department said in a statement on Thursday.
"All ducks at the property will be humanely disposed of under veterinary supervision, consistent with national policies and the site will be cleaned and cleared of the infection."
Around a million of Australia's 21-22 million egg-laying chickens have been or will be killed at affected farms to contain the virus, Federal Agriculture Minister Murray Watt said this week.
The country's second-biggest supermarket chain, Coles, imposed a two carton per customer limit on egg purchases at most stores this week but other retailers have not followed suit.
Industry body Eggs Australia said the outbreaks were causing disruption to supply but there was no overall shortage of eggs.
"People can be confident that we've got this in hand," Watt said.
Before the latest cases, Australia saw nine outbreaks of highly pathogenic avian influenza since 1976, all of which were contained and eradicated, according to the government.
Authorities say duck and chicken eggs and meat remain safe to eat.
REUTERS
