The brain disease, known as cerebellar ataxia, leads to progressive loss of brain matter in the dog's cerebellum which is responsible for control of the body's movements and other cognitive functions.
If a dog has the gene, symptoms of the disease start showing up around two months and the animal has to be put down shortly thereafter as there are no treatments for it.
Now a team at the University of Helsinki in Finland found a mutation in the gene "SEL1L" that seemed to be causing the disease. The mutation changes an evolutionarily important part of the gene, which probably disrupts the normal function of the protein, the researchers said.
"The ataxia gene is the first early-onset degenerative cerebellar ataxia gene that has been identified in dogs,"study researcher Hannes Lohi was quoted as saying by LiveScience.
"The SEL1L gene has not been previously connected to cerebellar ataxias in any species, and it represents a novel candidate gene for human early-onset ataxias," Lohi said.
With information about this mutation, the researchers worked with the Finnish animal diagnostics company Genoscoper to develop a genetic test to help eradicate the gene from the population.
Breeding pairs could be screened to determine the likelihood that their offspring would have the disease before they were paired up, the researchers said.
About 10 per cent of Finnish hounds are carriers of this mutation, meaning they have one copy of the genetic mutation.
The gene may also play a role in human degenerative brain diseases. About 20 genes have been found that cause different types of ataxias in humans, but none explained this dog disease, the team said.
The researchers, who detailed their work in the journal PLoS Genetics, said they are currently looking at human samples to determine if this SEL1L mutation could be at fault in any human cerebellar ataxias.