Testing of samples from a farm at Farleigh, north of Mackay, had revealed the presence of sugarcane smut, state Primary Industries Minister Tim Mulherin said.
The infection was discovered by a farmer on a routine inspection.
Previously, the disease was thought to have been confined to a relatively small area of south-east Queensland where 69 properties were found to be infected earlier this year.
"What this means is we are no longer addressing the problem as a biosecurity eradication and containment program centred on the Bundaberg-Isis area," Mr Mulherin said.
"We now move to an economic recovery focus to deal with this established and widespread disease."
Mr Mulherin has appointed independent economist David Watson to chair a team set up to assess the problem and provide an independent report by December 18 and a final report by February 18.
His team will include representatives of farmers' lobby group Canegrowers, BSES Ltd (Bureau of Sugar Experiment Stations), the Australian Sugar Milling Council and state and federal government departments.
The team will meet in Bundaberg on Monday.
In the meantime, Mr Mulherin was keen to reassure farmers in the Bundaberg/Isis area they could be paid $2,000 per hectare if they voluntarily removed infected cane crops.
"We will pay them if they choose to go down that path, but we are also acknowledging today that they can choose instead to retain and harvest the crop," Mr Mulherin said.
"The growers involved must weigh up the options and make the decision."
Sugarcane smut is a highly infectious disease that can seriously reduce yields by at least 30 per cent.
The fine black powder of fungal spores is harmless to humans and animals, so does not affect processed sugar.
Canegrowers chairman Alf Cristaudo said the only way to overcome the disease was to plant smut resistant cane varieties.
It has been estimated the sugar industry could lose up to $800 million over a five-year period if the smut spread along the 2,000km long stretch of cane-growing coastline stretching from northern NSW to far north Queensland.
Smut spores were discovered eight years ago in the Ord River area of Western Australia.
The disease is widespread in Indonesia and Papua New Guinea and can be spread by wind, migrating birds or transported on clothing, plant material and farm machinery.