Twelve New Zealanders associated with the HMNZS Te Mana have tested positive for COVID-19.
A Defence Force spokesperson confirmed to Newshub six Royal New Zealand Navy (RNZN) personnel and six family members returned positive results on Wednesday.
All are currently showing mild symptoms, with some starting to recover.
The 12 cases are among 103 New Zealand personnel currently stationed in Canada while the frigate undergoes significant upgrades.
Forty-six people - 21 RNZN personnel and 25 family members - are isolating as a precaution.
So far 40 negative tests have been returned.
"Some of our personnel have family with them, staying in an accommodation building 12km from the Canadian Forces Base Esquimalt where the FSU is being undertaken. It is this accommodation which is at the centre of the cases," the Defence Force spokesperson told Newshub.
"Other personnel staying in other areas of the base are following appropriate COVID-19 protocols, including the wearing of masks and social distancing."
The situation is currently considered to be "contained", the prompt action taken to identify and isolate affected personnel reducing the overall impact.
As a result of the outbreak, the upgrade of Te Mana has been suspended until later in April.
"The RNZN acknowledges the significant support of the Royal Canadian Navy and the Canadian Armed Forces who have embraced our personnel as their own. They, and local health authorities are ensuring those of our people affected have everything they need to make a full recovery," the spokesperson said.
"NZDF personnel and their dependants currently offshore are all screened for health vulnerabilities before they deploy and educated on protective measures to employ to minimise the risk of COVID-19 infection."
The personnel and their family members have yet to be vaccinated against the virus, however inoculation is expected to begin next month, with second doses scheduled for June.