Health authorities have confirmed they are investigating a "suspect positive case" of H5 bird flu in the Hunter Region.
Samples from a giant petrel near Hawks Nest have undergone testing at a Department of Primary Industries and Regional Development laboratory.
They have been sent from the laboratory at the Elizabeth Macarthur Agricultural Institute to the CSIRO's Australian Centre for Disease Preparedness for confirmation.
The Bennetts beach detection marks the first wild migratory seabird in the state to return a suspect positive result, and the sixth case in Australia.
"This latest development is incredibly concerning for both agriculture and for wildlife," Minister for Regional NSW and Minister for Agriculture Tara Moriarty said.
"The impact of H5 worldwide on wild birds and poultry has been devastating.
"But NSW and the rest of the country have been preparing for this moment for many years.
"We are working with federal, state and territory governments as we roll out plans that have been developed with all stakeholders, including industry, agriculture and wildlife organisations."
Hawks Nest resident Gordon Grainger said on Friday there had been no word in the close-knit coastal community.
"That's a bloody shock," he said.
"This is going to put the cat among the pigeons.
"The Myall Lakes are a RAMSAR-protected wetland ... we've got more species of migratory birds than Kakadu.
"It could be a devastation."
Ms Moriarty noted that before the Hawks Nest test "there have only been confirmed detections in vagrant migratory seabirds that occasionally visit southern Australia".
The risk to human health remains low and the strain is yet to be detected in commercial poultry, captive birds or become established anywhere in Australia.
"Our focus now is to increase surveillance and to detect any further infections early," NSW chief veterinary officer Jo Coombe said.
"We have now ramped up surveillance operations having trained more than 500 additional staff, including Local Land Services and National Parks and Wildlife Service field officers to undertake surveillance for H5 bird flu.
"The State Coordination Centre has been stood up in Orange, we have established the H5 bird flu call centre and we are briefing all key stakeholders on the current situation.
"We have innovative spatial mapping tools, decision-support systems and response databases to enable rapid, evidence-based action during a wildlife outbreak.
"We are using the best available data now to target actions for our most at-risk wildlife species and important natural places."
Julia Davies, of JD's Backyard Hens at Medowie, said she was cautious about the news, but hopeful the suspected case would be returned negative.
The heritage breeder rears anything from 1000 to even triple that many chickens through the breeding season from August, including rare and at-risk breeds.
Ms Davies said she and other breeders already had plans and biohazard procedures in place to limit the risk.
"All my breeding pens have netting over the top of them to limit wild birds flying into them," she said.
Losing the flock would be "absolutely devastating", Ms Davies said, which was not only financially valuable, but important for her mental health.
She said she wanted people not to be alarmed, especially until the case was confirmed, and to exercise best-practice procedures.
"Continue to do what you normally do with your backyard chooks and don't go for a walk along the beach, pick up a dead bird or walk around a dead bird and then walk home without washing your shoes," she said.
"Be mindful and be aware of how you can cross-contaminate it to your flock at home."
Anyone observing unusual deaths or illness in wild birds is urged to avoid contact, record it through photos or video, and report the incident immediately to the Emergency Animal Disease (EAD) Hotline on 1800 675 888.
- with Eliza Spencer and Dakota Tait
