Clusters of this particular strain had not been identified in England since records began in 1994 and were previously associated with travel
A fourth child has been admitted to hospital as three further cases of E. coli infections, with links to Dorset, are confirmed by Public Health England.
Tests have shown it is the same 055 strain that has affected 27 other people, PHE said.
On Monday, it announced a third child was being treated in hospital for serious kidney problems as a result of an E.coli infection.
In May, two other children were also admitted to hospital.
The children each contracted haemolytic uraemic syndrome (HUS), the most common cause of acute kidney injury in children.
No common source has been identified.
However, a PHE spokesperson said: "There is definitely something in the environment.
"There is no rhyme or reason to the cases, they're sporadic and not just happening in one particular area."
Animal droppings
PHE said close family contacts and pets were being tested and follow-up investigations were taking place.
It urged Dorset residents and visitors to be "extra vigilant" with hand hygiene.
In June, the O55 strain was found in animal droppings outside the home of an affected family, but it is not clear whether they came from a wild or domestic animal.
Noeleen McFarland, from PHE, said: "We have interviewed all of those affected, or their parents and their close contacts, to look for possible causes in the days before they became ill."
A cluster of cases of the bacterial illness in Dorset was investigated in November 2014, with another outbreak in May. There was also a further case in July.
Areas previously affected include Blandford, Portland, Bournemouth and Poole.
There have also been some cases outside the county which had links to people from Dorset.
Avoiding E. coli infection
Wash hands thoroughly after using the toilet, before and after handling food and after handling animals
Remove any loose soil before storing vegetables and salads
Wash all vegetables and fruits that will be eaten raw
Store and prepare raw meat and unwashed vegetables away from ready-to-eat foods
Do not prepare raw vegetables with utensils that have also been used for raw meat
Cook all minced meat products, such as burgers and meat balls, thoroughly
People who have been ill should not prepare food for others for at least 48 hours after they have recovered
Source: Public Health England, external
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