In a statement, the Office of Personnel Management said that it has identified a cybersecurity incident potentially affecting personnel data for current and former federal employees, including personally identifiable information.
The Department of Homeland Security's Computer Emergency Readiness Team and the Federal Bureau of Investigation have been roped into to investigate the major hacking of the US Government computers.
US officials believe the latest attack could be the biggest breach ever of the government's computer networks.
Senator Mark Warner, a member of the Senate Select Committee on Intelligence, said the reported breach is part of a troubling pattern by this agency in failing to secure the personal data of federal employees - the second major breach in a year.
"Cyberattacks present a critical threat to our national security and our economy. We cannot afford to keep dragging our feet in addressing the escalating threats posed by hackers out to steal individuals' personal information," he said.
The Washington Post and The Wall Street Journal reported the computer system was hacked by the Chinese government.
"It was the second major intrusion of the same agency by China in less than a year and the second significant foreign breach into US government networks in recent months," The Post said. "Investigators suspect that hackers based in China are responsible for the attack," The Wall Street Journal said.
"Cyber attacks are generally anonymous and conducted across borders and their origins are hard to trace," foreign ministry spokesman Hong Lei said at a regular briefing.
"Not to carry out a deep investigation and keep using words such as 'possible' is irresponsible and unscientific," Hong said.
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