The latest death came in the remote northwestern region of Xinjiang, where 86 people fell ill after consuming the milk product that contained the industrial chemical melamine, a notice on the local government's website said.
It gave few details on the latest fatality, such as whether it was a baby or when the death occurred.
The Xinjiang fatality adds to three deaths confirmed on Wednesday by Health Minister Chen Zhu, who also said more than 6,000 babies nationwide had fallen ill.
The three deaths were caused by kidney failure after drinking the milk powder containing melamine, in a scandal that has caused panicked parents around China to besiege hospitals seeking medical checks for their children.
Melamine, a chemical normally used in plastics, was illegally mixed into milk products and made its way into the baby formula of 22 Chinese dairy firms, authorities said this week, months after babies first started falling ill.
The chemical was apparently introduced by dairy suppliers to give watered-down milk the appearance of having high protein levels.
Chinese police made 12 more arrests related to the scandal on Thursday, Xinhua news agency reported, bringing the number arrested to 18.
The new arrests came in the northern city of Shijiazhuang, where the dairy manufacturer at the centre of the scandal, Sanlu Group, is based.
Twelve of those arrested were milk dealers suspected of selling contaminated milk, while the other six sold melamine, Xinhua said.
The mayor of Shijiazhuang was also sacked Thursday, according to Xinhua. Police had also detained the sacked chairwoman of Sanlu on Wednesday, although she was not formally arrested.
Beefing up its response to the crisis, the government also said Thursday it would close loopholes that had allowed many companies to avoid scrutiny on safety, and step up testing of livestock feed.
The new measures came a day after the country's top leadership slammed supervision systems in an admission of official failures.
"(The scandal) has shown us that the dairy market is chaotic, flaws exist in supervision mechanisms, and supervision work is weak," state television said Wednesday night in summarising the conclusions of a Cabinet meeting.
The government had earlier on Wednesday ordered nationwide checks for melamine on all dairy products.
As part of the stepped up supervision announced Thursday, the country's top product-quality agency cancelled an eight-year-old system under which food producers could gain exemption from safety inspections if they had good quality records.
State-run Xinhua news agency said one of the companies utilising that system was Sanlu.
The product quality agency, the General Administration of Quality Supervision, Inspection and Quarantine, also ordered an "urgent" increase in testing for melamine in livestock feed and feed additives.
The move appeared to signal official concern over possible melamine contamination in the wider agricultural sector.
The administration said it was aimed at "ensuring the safety of feed and feed additives", according to Xinhua.
Even before the milk powder scandal, foreign media investigations had found that melamine was widely used in China to give livestock feed the appearance of higher protein content.
China has endured a litany of scandals in recent years over its poor food quality and problems with a wide range of other products that have been exported, including drugs and toys.
Two of the 22 milk companies found to have contaminated products exported to Bangladesh, Myanmar and some African countries. However, there has been no evidence yet the tainted products were sold overseas.
