A baby has died at St Thomas' Hospital after 15 cases of scepticaemia were discovered in babies at six hospitals across southern England.
Three of the affected children were being treated at St Thomas' Hospital.
In a statement, Guy's and St Thomas' NHS Foundation Trust said: "On Saturday 31 May the trust identified a bacterial infection in the Neonatal Intensive Care Unit at St Thomas' Hospital.
"The infection has affected three babies. Sadly one of these babies died on Sunday 1 June. 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."
Professor Mike Catchpole, Public Health England's incident director, said: "This is a very unfortunate incident and PHE have been working closely with MHRA to investigate how these babies could have become infected.
"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 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 of the Medicines and Healthcare Products Regulatory Agency added: "Patient safety is our top priority and we are working alongside Public Health England 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."