Indonesia said that tests had shown it was suffering from the same strain of bird flu that has left 12 people dead in Thailand and Vietnam.
"The results of the identification ... show that the subtype of the type A avian influenza in Indonesia is H5N1," said the agriculture ministry's director for animal health, Tri Satya Naipospos. The announcement followed overseas tests.
"These results will be used as a basis for measures to be taken by the government ... and to determine the strain of vaccines which will be used to eradicate this avian influenza," Naipospos told a press conference.
She said that so far no Indonesians were known to have been infected by the virus, which has killed millions of birds in the country.
Compensation will be given to chicken farmers who suffered the outbreak after January 29, she said.
Naipospos said the government would take two-pronged measures to deal with the outbreak.
In some cases birds sharing the same coops would be destroyed and those within one kilometer would be vaccinated. In new cases, authorities would cull all infected birds and also healthy birds within one kilometer of an outbreak.
Indonesia says millions of birds across much of its vast archipelago have been infected. But the country was among the last in the region to order a cull to stop the spread of the disease, which has hit 10 countries.
It admitted the presence of the disease only on January 25, months after birds began dying.
The H5N1 strain has emerged in eight countries including Indonesia while Taiwan and Pakistan have reported weaker strains.
The World Health Organisation has warned that the highly pathogenic H5N1 strain could kill millions across the globe if it combines with a human influenza virus to create a new virus transmissible among humans.