Government veterinary experts were called to the farm near Lowestoft in eastern England late on Thursday and preliminary tests show the birds were killed by the H5 strain of avian flu.
Further tests are under way to identify the strain more precisely, and restrictions are in place to stop the movement of birds to or from the site.
"All poultry farmers are in shock as we had no inkling that is had suddenly turned up in England," National Farmers' Union Poultry Board chairman Charles Bourns told Reuters.
"The last time sales dropped between two to three percent, but it was enough to affect the market place as there was a lot of discounting."
The farm has 160,000 turkeys, but only one of the 22 sheds that house the birds has so far been affected by the outbreak.
In May, 50,000 chickens at three farms in Norfolk, also in eastern England -- home to some of Europe's biggest poultry farms -- were culled and disposed of after the H7N3 strain of bird flu was detected.
A wild swan found dead in Scotland in March 2006 had the highly pathogenic H5N1 version of the bird flu virus which can kill humans. It was thought to have caught the disease elsewhere, died at sea and been washed ashore in Scotland.
Bourns said those two scares cost the British poultry industry 58 million pounds ($115 million) in 2006.
The H5N1 virus is known to have infected 270 people and killed at least 164 worldwide since 2003, most of them in Asia, and over 200 million birds have died from it or have been killed to prevent its spread.
An outbreak of H7N3 in the Netherlands in 2003 led to the culling of a third of the poultry flock. It also infected around 90 people, including a veterinarian who died.
"Any avian flu virus is contagious and this one is causing deaths in birds," said the President of the British Veterinary Association David Catlow.
"If it is H5N1, there will be plans to cull it out completely before it has a chance to spread to other farms. The most appropriate response is to have immediate plans for facilities to slaughter the birds if it turns out to be H5N1."
Avian flu expert Colin Butter of the Institute of Animal Health added: "This news is a bit surprising because it's not the time of year when we have a lot of bird migration.
"We would not expect this to happen in the middle of winter. If it was going to happen we would expect it to happen in spring."