Dubbed H7N7, the virus was able to infect mammals in a lab experiment, said the team, warning H7 viruses "may pose threats beyond the current outbreak".
"The continuing prevalence of H7 viruses in poultry could lead to the generation of highly pathogenic variants and further sporadic human infections," they wrote in the journal Nature.
According to the World Health Organisation (WHO), there have been 135 confirmed cases of people contracting H7N9 bird flu, of whom 44 died. All the cases were in China, except for one in Taiwan.
The new work points to yet another viral threat.
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"If (we) let this H7N7 continue circulating in chickens, I am sure that human infection cases will occur," study co-author Yi Guan from the University of Hong Kong told AFP by email.
"This virus could cause more severe infection than... H7N9, based on our animal experiment."
H7N7 spreads easily in birds. It caused one human death and more than 80 cases of mild disease in the Netherlands in 2003.
"We think it is scary for humans," said Yi.
"Our entire human population almost has no antibodies against the H7 subtype of influenza virus. Thus, if it causes pandemic outbreak, it will kill many people."
Among a sample of 150 chickens tested, 36 carried the H7N7 virus, said Yi. Many birds had both H7N7 and H7N9.
Strains of the H5, H7 and H9 avian influenza subtypes have caused human infections, mainly following direct contact with infected poultry. None of the strains have mutated to become easily transmissible from person to person -- the epidemiologist's nightmare.