Asylum seekers staying at the Cresta Court in Altrincham have been stopped from leaving the hotel after an outbreak of scabies was confirmed.
The Vine Hotels-owned hotel was abruptly closed in October in order to house up to 300 all-male migrants while their claims for asylum were assessed.
Trafford Council has now confirmed that a "small number of cases" of scabies have been identified.
The highly contagious skin condition is caused by tiny mites which burrow into the skin and causes intense itching, redness and a pimple-like rash. It spreads through close physical contact or sharing items like bedding or clothing.
A spokesperson for Trafford Council said: “Trafford Council’s Public Health team has been made aware of a small number of cases of scabies at the Cresta Court Hotel in Altrincham.
"Council officers are working closely with the hotel management team to deal with the issue.
"Scabies is a very mild illness that, once identified, is easily treated. It is a common condition that our team often deal with in a range of settings.”
Serco, the government agency which is handling all asylum seeker accommodation on behalf of the Home Office, said that all movement in and out of the hotel had been stopped as a result.
A Serco spokesperson said: "All of the necessary steps are being taken in line with NHS recommendations to stop the spread and anyone experiencing symptoms is being asked to see a GP who is at the hotel.
"Additionally all movement has been stopped in and out of the hotel during the outbreak."
This autumn has seen a more general rise in scabies cases nationally, with Trafford Public Health contacting local schools in early November with "reports of individuals locally with scabies rash, including school-aged children".
Dame Angela Eagle, Minister of State for Border Security and Asylum, confirmed in the House of Commons last month that the Cresta Court was one of 14 new migrant hotels to have opened since Labour won the general election in July, taking the total number across the UK to 220.
Speaking in the debate, newly elected Labour MP for Altrincham and Sale West, Connor Rand, said he was "pushing" for the cases of the Cresta Court migrants to be "prioritised" so that the situation could be resolved "as soon as possible".
