The South Australia government on Tuesday confirmed the seal had died of the virus at Pages Conservation Park, consisting of two small islands off Kangaroo Island.
Pages is a key breeding site for the endangered Australian sea lion, which has a total population of just 12,000.
It has sparked fears of a possible extinction event, with seal colonies worldwide devastated by the virus.
It comes after a long-nosed fur seal died at Beachport, South Australia, on Sunday, marking the Australian outbreak's first mammal death.
"It's not likely to lead to an extinction event in the short term, but if we had several thousand indviduals die, that is going to make that population much more susceptible to extinction in the future," Deakin University Professor Euan Ritchie told AAP.
Overall, 309 positive bird flu cases have been recorded nationwide, including 195 in SA alone.
A program to vaccinate Australian birds gained momentum on Tuesday, with captive populations of two of the country's most critically endangered species prioritised.
Up to 100 native birds at Cleland Wildlife Park south of Adelaide have been approved for vaccination across more than 30 different species.
Captive orange-bellied parrots, which has a wild population of fewer than 100 birds, and regent honeyeaters - which number fewer than 400 - are among the species approved.
Others include the magpie goose, Australian pelicans, regent parrots and the red-tailed black cockatoo.
There remained no bird flu detections in poultry or other livestock and the risk to human health remained low, authorities said.
Queensland confirmed its second bird flu case in an unidentified species of shearwater.
The migratory seabird was recovered from Castaways Beach on the Sunshine Coast, with initial tests for H5 coming back positive on Monday night.
The onset of migration from the northern hemisphere has authorities on high alert.
Spring signals the onset in Australia of the arrival of the short-tailed shearwaters, which has an estimated population of more than 30 million birds.
The species completes a 30,000km round-trip migration every year, returning to southeast Australia to breed after spending the winter in Arctic waters.
At the same time, more than two dozen species of shorebirds are beginning their migration to spend summer in Australia after breeding in the northern hemisphere.
"If we start seeing bird flu getting into shearwater populations that could potentially become a super-spreader event for that pathogen," Prof Ritchie said.
Queensland Department of Primary Industries' Dr Rachel Chay warned authorities would have to be prepared as the migration season continued amid fears of future mass events in the state.
"What we're seeing in some of our southern states is what potentially could happen in Queensland," she told reporters in Brisbane.
The community is being urged to immediately report sick or dead wild birds to the Emergency Animal Disease Hotline on 1800 675 888.
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