A baby which died from blood poisoning after being infected by a suspected contaminated drip was being treated in the neonatal intensive care unit at St Thomas' Hospital in London.
Three babies have been affected by the infection at the hospital, with the other two responding well to antibiotics, a spokeswoman for Guy's and St Thomas' NHS Foundation Trust said.
A total of 15 babies in six hospitals across England have developed septicaemia after being infected with the bacteria known as Bacillus cereus, Public Health England said.
PHE said the cases have been "strongly linked" with a number of batches of a particular form of intravenous liquid called parenteral nutrition, which was given to the babies.
The hospital spokeswoman said the infection was discovered on May 31, and the baby died on June 1.
She added: "The infection has affected three babies. Sadly one of these babies has died. The other two are responding well to antibiotics.
"All babies on the unit are being screened for the bacterium as a precaution and enhanced infection control measures have been put in place to prevent any further cases.
"These enhanced measures will remain in place until the Trust is satisfied that no other babies are at risk.
"The Trust is working closely with Public Health England and the Medicines and Healthcare Products Regulatory Agency as we are one of six trusts involved in their wider investigation.
"We are supporting the parents involved and keeping them fully informed."
Parenteral nutrition, manufactured by ITH Pharma Limited, is supposed to deliver a variety of nutrients intravenously when a baby is unable to eat on its own.
A PHE spokeswoman said investigations with the company have identified "an incident that might have caused the contamination".
The affected babies were in neonatal intensive care units at three London-based NHS organisations - Chelsea and Westminster NHS Trust, Guy's and St Thomas' NHS Foundation Trust and The Whittington Hospital - as well as Brighton and Sussex University Hospitals NHS Trust, Cambridge University Hospitals NHS Foundation Trust and Luton and Dunstable University Hospital.
"Many of the babies were premature and very vulnerable and one baby has sadly died but the others are responding to antibiotic treatment," the PHE spokeswoman said.
She said PHE and the Medicines and Healthcare products Regulatory Agency (MHRA) confirmed that an investigation has been launched into the issue.
The manufacturer has issued a recall and the MHRA has issued an alert to draw attention to the product recall.
PHE said doctors have also been given advice on identifying any potential cases of infection and how to dispose of affected stock.
"This is a very unfortunate incident and PHE have been working closely with the MHRA to investigate how these babies could have become infected," PHE's incident director, Professor Mike Catchpole, said.
"Given that the bacteria is widely spread in the environment, we are continuing to investigate any other potential sources of infection. However all our investigations to date indicate that the likely source of the infection has been identified.
"We have acted quickly to investigate this issue alongside the MHRA and we have taken action to ensure that the affected batches and any remaining stock of this medicine is not being used in hospitals."
Adam Burgess, manager of the MHRA's defective medicines reporting centre, said: "Patient safety is our top priority and we are working alongside PHE to establish what has happened. We have sent inspectors to the manufacturer's facility to carry out a detailed and rigorous inspection and we have ensured that the potentially affected medicine is recalled."
ITH Pharma is "very saddened" by a baby's death at St Thomas' Hospital in London that officials have "strongly linked" to one of its products and the firm is co-operating fully with the investigation, managing director Karen Hamling said.
A Whittington Health spokeswoman said: "We identified a baby within our neonatal intensive care unit with a bacterial infection earlier this week. "The baby responded well to treatment for the infection and has since been transferred to another specialist unit for an unrelated condition. Patient safety is a key priority and we are fully confident in the infection prevention and control measures in place within our neonatal intensive care unit. There has been no risk to other babies within this unit."
Addenbrooke's Hospital said it had had two cases, with both babies "stable and improving". A spokesman said: "Public Health England has been investigating a small number of cases of infections on neonatal units within six UK hospitals, including CUH Addenbrooke's.
"The infections were traced back to a feeding substance which has now been withdrawn. All the babies concerned are being treated and have responded well. Public Health England believes the outbreak is now controlled but will be following up to make sure there is no further risk. If parents have any concerns they should speak to their clinician."
Two further cases were at Luton and Dunstable University Hospital. Dr Jennifer Birch, its clinical director for neonatal intensive care, said: "We are informing all of the parents whose babies are being cared for in our neonatal intensive care unit about this situation. We are reassuring them that the infection does not spread from baby to baby.
"The two babies who have been infected are being treated with antibiotics and we are using an alternative type of parenteral nutrition."