A 52-year-old man from southern Binh Phuoc province died on Saturday after receiving treatment in Ho Chi Minh City, the ministry said in a statement issued late yesterday.
"His sample... Tested positive to the H5N1 virus," the statement said.
It was Vietnam's first fatality from the virus since a four-year-old child died in April 2013.
Demand for poultry in Vietnam is expected to surge over coming days as families gear up to celebrate the lunar new year festival Tet next week.
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But experts fear it could mutate into a form easily transmissible between humans, with the potential to trigger a pandemic.
The H5N1 virus has caused 649 confirmed flu cases in humans since it re-emerged in 2003, of whom 385 died, according to the World Health Organization (WHO).
Vietnam has recorded one of the highest fatality rates from bird flu in Southeast Asia, with the disease claiming 63 lives so far, WHO said.
Neighbouring Cambodia recorded 13 deaths from the virus last year, as it battled its deadliest outbreak since 2003.
Cold weather, an increase in poultry production and the mass movement of people ahead of Chinese New Year could increase the circulation of the virus in the coming months, Singapore's health ministry said.
It urged people to avoid close contact with those exhibiting flu-like symptoms and to seek medical attention promptly if feeling unwell.
Local authorities in China's commercial hub Shanghai yesterday said two people, including a medical doctor, have died from the virus this year.