Potato Ring Rot has been found in a shipment of potatoes originating from a grower in Herefordshire.
There has only been one previous case of Potato Ring Rot in the UK
The potatoes of the Sante variety were being packed at a Cambridgeshire factory when symptoms linked to the disease were identified on Friday.
Subsequent tests for the bacterial infection at the Central Science Laboratory proved to be positive.
Action has now been taken to prevent the use or movement of any material which may present a risk.
The Department for the Environment, Food and Rural Affairs (Defra) says there has been "good co-operation" with both the grower and the packing company, neither of which has been named.
A tracing and testing programme has been initiated, which will include an investigation into the origin of the potatoes supplied to the grower in Herefordshire.
Ring Rot is mainly found in north America and in northern and eastern Europe.
There has only been one previous case in the UK, in Wales in 2003.
Defra says if the disease was to become established, the effect on the seed potato industry would be substantial.