An announcement by the official Korean Central News Agency said "a few farms" were infected, and that several hundred thousand chickens were slaughtered and burned to halt further infections.
The farms, near the capital, Pyongyang, included the Hadang farm, which North Korea has previously hailed as one of its showcase agricultural facilities.
The news release said that "dynamic work" was being undertaken to stop the outbreak from spreading to other parts of the country. It did not specify when the outbreak began or which strain of the flu virus was found, but did say no human beings had been infected.
North Korea specialist at Korea University in Seoul Professor Nam Sung-wook says North Korea's severe economic shortages may be behind Pyongyang's uncharacteristic frankness.
He says he believes the North will seek pharmaceutical aid from South Korea and the international community in the coming weeks. A World Health Organization team is already in North Korea on a fact-finding mission.
"They are short of medicine. That is why they announced the bird flu in public," said Mr. Nam.
The announcement confirms media reports in South Korea that first emerged last month. North Korea had previously maintained it was free of the disease.
Following those reports, South Korean officials announced they were halting what would have been the first imports of North Korean poultry in almost 50 years. Days later, Japan announced it would not allow North Korean poultry to enter the country.
An especially severe strain of bird flu known as H5N1 has killed at least 48 people in Southeast Asia since December 2003. In most if not all cases, the victims contracted the disease after handling infected poultry.
International health authorities say they fear the virus could mutate into a form easily transmissible from human to human.