The water-borne disease was reported in Kantajharigarh, Talagarh, Uppergarh and Jhumpan villages of Talagarh panchayat under Korei block, they said.
At least 65 persons suffering from the disease were undergoing treatment at hospitals, officials said.
One of the patients, Fusina Jena (40) of Talagada village died on Saturday night, Chief District Medical Officer (CDMO), Prasanna Mohanty said.
Health teams from Korei, Jajpur Road and district head quarters hospital were pressed in to service. Preventive measures were taken in the affected villages and the situation is stated to be under control, Mohanty said.
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"Consumption of contaminated water from unhygienic sources in absence of safe drinking water is said to be the cause of the disease," the CDMO said.
All the water bodies in the affected villages have been disinfected and sufficient medicines distributed.
District Collector Anil Kumar Samal visited the affected villages along with the CDMO to take stock of the situation.
He immediately ordered closure of all schools in the affected areas for three days as a precautionary measure. He also directed the school authorities to suspend even the midday meals for three days.
The villagers are dependent on pond water which is contaminated. Besides, many people are collecting water from open wells in the villages in the absence of tube wells or pipe water.