Austrian authorities said the H5N1 strain of the virus was suspected in two swans found dead near the border with Slovenia, which is itself investigating a suspect case.
If this is confirmed by an EU lab in Britain, Austria would be the third European Union country after Italy and Greece with H5N1 outbreaks in birds.
A suspected case of human H5N1 infection in Greece turned out to be a false alarm on Tuesday when test results came back negative.
Preliminary tests have shown that two swans found dead on the German island of Ruegen in the Baltic Sea could also have been infected by the H5N1 strain.
Since 2003, at least 90 people, mostly in China and Southeast Asia, have been killed by H5N1, now also found in Iraq.
In its westward sweep, H5N1 has also been confirmed in Turkey, Bulgaria, Romania -- which reported a new case on Tuesday -- and Croatia.
The disease is highly infectious among birds, including poultry, and can be passed to humans.
Doctors fear that if it mutates into a form transmissible between people it could trigger a flu pandemic and kill millions worldwide.
Most of the European cases in the latest wave have been in wild migratory swans, and the UN Food and Agriculture Organisation (FAO) has warned of an upsurge in coming months due to seasonable migration patterns.
"Six months ago, we alerted the international community to the risk of bird flu reaching Africa," said FAO official Samuel Jutzi in Rome.
"Now we have to say that there is a risk for Europe in the spring."
Veterinary experts from the EU's 25 member states will meet in Brussels for two days of talks starting on Wednesday to evaluate the growing threat -- and to plan for possible mass poultry culls if necessary.
An order to slaughter poultry would go further than the measures imposed so far, which involve setting up protection and surveillance zones around the affected cases, and limiting the movements of birds.
Alert in Africa
Meanwhile in Nigeria, scientists have been examining blood samples from farm workers, as foreign experts arrived to help protect Africa from its possible first human cases of the H5N1 virus.
Nigeria last week announced Africa's first avian outbreak of H5N1, which experts believe was spread by infected migratory birds.
Since then, Nigerian veterinary scientists have confirmed its presence in flocks in three states and strongly suspect it has infected birds in five more.
The head of a government clean-up team said that suspected outbreaks of the deadly H5N1 strain are "spreading fast" through farms around the north Nigerian city of Kano.
Officials have also expressed fear that it could spread southwest, to the densely populated area around Africa's biggest city, Lagos, home to at least 16 million people, many of whom keep chickens in their back yards.
Fears that bird flu may have already reached Niger, which lies north of Nigeria, were raised on Tuesday by the FAO.
"There are suspicions for Niger and there is great agitation along the border between Nigeria and Niger," the head of the agency's contagious diseases service, Juan Lubroth, told a press conference in Rome.
The Nigerian situation is also being watched closely in Spain, where a junior minister said it is "probable" that bird flu would arrive from Nigeria in birds migrating north.
French authorities warned of a heightened risk of bird flu contamination and called for poultry to be kept indoors, while Germany also ordered all poultry be shut indoors from February 20.