NSW Health confirmed the man in his 50s died on Thursday after being bitten by a bat several months ago.
The northern NSW man was the first recorded case of Australian bat lyssavirus in the state and only the fourth in the nation.
Lyssavirus transmits from infected bats to humans when virus in their saliva enters the body through a bite or scratch.
Emerging bat viruses expert Alison Peel told AAP the virus, like rabies, travels through the nervous system to the brain.
"That happens very slowly so it's quite usual for that to take a number of months between the exposure and the clinical signs developing," the University of Sydney Horizon Fellow said.
More than 100 people received medical treatment after potential or suspected exposures each year, Dr Peel said, but it was unknown how many actually contracted the virus.
"But certainly, once clinical signs develop ... it's generally, invariably fatal."
Australia is home to more than 80 species of bats, and without widespread surveillance of them all, it's safest to assume any bat could be carrying the virus.
It was only transmitted through direct contact, so being near bats, or even pooed on by one, was not cause for too much alarm, Dr Peel said.
"It's an important consideration to try and avoid direct contact and not touching bats, but we shouldn't panic and take it out on the bats themselves."
The virus is also potentially deadly to bats.
"It does seem to be circulating within their populations at very, very low levels," Dr Peel said.
"But there are quite a high proportion of bats out there that have antibody evidence that suggests that they have been exposed to the virus in the past and they've not become sick.
"There is something unique about the way bats are able to handle the infection."
It is extremely rare for the virus to transmit to humans because it does not spread through the air.
A NSW Health spokesman said anyone bitten or scratched by a bat should seek urgent medical assessment.
"Only wildlife handlers who are trained, protected, and vaccinated should interact with bats."
People bitten or scratched by a bat require rabies immunoglobulin and rabies vaccine.
In 2024, 118 people were treated after being bitten or scratched by a bat around the nation.
The virus was first discovered in a black flying fox in Queensland in 1996.
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