At least one school is among more than 20 locations that have received compost that might contain asbestos, authorities have warned.
A search is under way for the potentially tainted mulch after asbestos was detected in a compost stockpile at company NuGrow's Ipswich site, west of Brisbane.
Authorities have identified an independent school in the state's southeast as one of the sites that has received mulch from NuGrow Ipswich in the past 30 days.
About 25 businesses overall - mostly landscape suppliers - have been provided compost that might contain the hazardous material.
"Agencies are contacting those businesses to identify where the mulch could be and to organise for it to be tested," Premier Steven Miles told reporters on Wednesday.
The Department of Environment, Science and Innovation (DESI) launched a joint inspection across southeast Queensland after an asbestos outbreak in Sydney.
NuGrow is the only site that has returned a positive result after 23 landfill operations, transfer stations, landscape suppliers, composters, and mulch suppliers were inspected.
Results from half of the tested sites will be returned by Friday.
Two fragments - about 1.5mm by 3mm - were discovered in the large Ipswich stockpile on February 20, with NuGrow claiming it was bonded asbestos.
However, DESI confirmed the more dangerous friable asbestos had been detected.
It was unclear how the stockpile was contaminated because NuGrow was not permitted to handle asbestos, DESI said.
Ipswich Mayor Teresa Harding criticised NuGrow for not identifying the substance properly.
"It's really important that NuGrow step up and tell the truth to our community," she told reporters.
Director of Public and Environment Health in West Moreton Bruce Morton said there appeared to be a very low risk to the community.
But Ms Harding said the asbestos discovery had sparked anxiety.
"There's a lot of disappointment and people are concerned about their health," she said.
A hotline has been set up for anyone concerned that they might have been exposed to the mulch.
DESI is taking more samples at the Ipswich site to gauge contamination while assessing any health risks with authorities.
Sites outside the state's southeast, including other NuGrow facilities, will also be subject to inspection.
Work, Health and Safety Queensland regulator Peter McKay said most of the businesses that received potentially tainted mulch from NuGrow were near the Ipswich facility.
NuGrow is set to be investigated by DESI.
The company on Wednesday said a "low level" of asbestos had been identified.
"The level of asbestos concentration found in the positive sample is extremely low, equivalent to what might be detected in a sample of sand, mulch or soil taken from any beach, garden, park or other public space," it said in a statement.
"No respirable (airborne particles) asbestos was found in all samples and all other samples taken from the site were clear of asbestos.
"There is currently no evidence to suggest that people who may have come in contact with this material are at risk."
NuGrow said it was working closely with authorities.
"The safety of NuGrow’s staff, clients and the broader community is our utmost priority at this time, as always," it said.
