P. austrocedrae infection was only confirmed in the UK last year on other trees from this family, at two sites in Scotland.
The Forestry Commission’s Forest Research agency is undertaking further studies to confirm how damaging it might be on juniper, Lawson cypress and other potential tree hosts.
Dr John Morgan, Head of the Forestry Commission’s Plant Health Service, said: "Juniper habitat is rare, and a number of people and organisations are working hard to protect and restore it.
"It is therefore especially disappointing to learn that this very damaging disease has affected such an important site in England.
"We join our partners in Natural England and Fera in urging everyone who works at, or visits this site to co-operate with the measures we develop to prevent accidental spread of the disease.
"By taking these precautions we stand our best chance of preventing the disease spreading to other places."
Martin Ward, Head of Policy at Fera said: "This is a significant finding, the first of its type in Europe, and we are working closely with our partners to tackle the situation in Upper Teesdale.
"We also need to see whether the pathogen is present elsewhere, as this will influence our longer-term strategy.
"This additional survey work, together with the consultation that we plan to carry out, will be important in moving forward."
The Government recently launched the Tree Health & Plant Biosecurity Action Plan to ensure that the UK's defences against tree pests and diseases are as robust as possible.