The new Angry Birds offering is infected with malicious software that allows cyber-criminals full control of infected handsets.
TheTrojan communicates with a remote website in an attempt to download and install further malware onto the compromised Android smartphone.
The malicious software is not found on Google's official Play store - instead, it's available free via unofficial Android app stores.
The Daily Mail said that hidden inside a fully working version of the game, a trojan quietly installs malicious code that can be used to steal personal information such as banking details - and even use Android phones as part of mass cyber attacks against other websites.
Angry Birds has been downloaded 700 million times - and now the game will become a weekly TV series.
Sophos's Graham Cluley, writing on the Naked Security blog, said, "Android malware authors have seized an opportunity to infect unsuspecting smartphone users with the launch of the latest addition to the immensely popular Angry Birds series of games."
"SophosLabs recently encountered malware-infected editions of the "Angry Birds Space" game which have been placed in unofficial Android app stores."
"Effectively, one's Android smartphone is now a part of a botnet, which is under control of hackers," says Cluley.