A post went viral on Chinas biggest social network, WeChat, saying an outbreak of H7N9 human infection had attacked eight medical workers and some family members after a villager in the suburbs of Xiantao City was infected with bird flu.
Local authorities have ordered temporary shutdowns of some poultry markets and ramped up testing.
The latest deaths include a woman in her 20s and her young daughter, both of whom had contact with live poultry. But experts worry that the virus could eventually mutate into one that passes easily between people.
According to the agency, the eastern coastal province of Zhejiang is suffering the worst epidemic in three years with 35 human infections and 11 fatalities in January.
This year's resurgence is the deadliest in four years. Since November, there have been at least 355 confirmed H7N9 cases in mainland China, according to the Hong Kong Center for Health Protection.
More than 250 cases of H7N9 have been reported to the National Health and Family Planning Commission from 16 provinces and regions.
The death toll since the start of the year has been unmatched since at least 2013.
China has gained extensive experience in dealing with such crises since being hit by the 2003 SARS outbreak that was believed to have originated among animals in southern China.
Xinhua said the market closures this time have "greatly reduced the number of new infections in many regions, " citing Ni Daxin, deputy director of the emergency response center at the Centers for Disease Control and Prevention.
China fights spread of deadly bird flu virus
Reviewed by Newstime