Chemical weapons experts have determined that mustard gas was used in a Syrian town where Islamic State insurgents were battling another rebel group. 

A confidential reported dated 29 October by the Organisation for the Prohibition of Chemical Weapons (OPCW) concluded "with the utmost confidence that at least two people were exposed to sulfur mustard" in the town of Marea, north of Aleppo, on 21 August, as shown to Reuters.

"It is very likely that the effects of sulfur mustard resulted in the death of a baby," it said.

The findings provide the first official confirmation of use of sulfur mustard, commonly known as mustard gas, in Syria since it agreed to destroy its chemical weapons stockpile, which included sulfur mustard.

The report did not mention Islamic State, as the fact-finding mission was not mandated to assign blame.

"It raises the major question of where the sulfur mustard came from," one source said. "Either they (ISIS) gained the ability to make it themselves, or it may have come from an undeclared stockpile overtaken by IS. Both are worrying options."

Syria is supposed to have completely surrendered the toxic chemicals 18 months ago. Their use violates U.N. Security Council resolutions and the 1997 Chemical Weapons Convention.

State Department spokesman John Kirby said the OPCW released three reports to member states on 29 Oct, adding "two of these reports are very disturbing. The OPCW has confirmed (chemical weapons) use in one investigation, and concluded likely use in a second." Reuters reported.

The reports, which will be formally presented to U.N. Secretary General Ban Ki-moon later this month, add to a growing body of evidence that the Islamic State group has obtained, and is using, chemical weapons in both Iraq and Syria.

"If it is determined that a non-state actor such as ISIL was also using chemical weapons, such use would be consistent with ISIL's record of complete disregard for human rights and international norms and values," Kirby said, using an alternate acronym for Islamic State.

Islamic State fighters fired mortar rounds containing mustard agent at Kurdish peshmerga fighters in northern Iraq during clashes in August. Blood samples taken from about 35 fighters who were exposed in the attack showed "signatures" of mustard gas, Kurdish authorities said earlier this month.

A team of OPCW experts has been sent to Iraq to confirm the findings and is expected to obtain its own samples later this month, one diplomat said.

A special session has been called by the OPCW's 41-member Executive Council to discuss the Syrian findings and it will be held in The Hague on 23 November, sources at the OPCW told Reuters.

Sulfur mustard - which causes severe delayed burns to the eyes, skin and lungs - is a so-called Schedule 1 chemical agent, meaning it has few uses outside chemical warfare.

Syria agreed in September 2013 to destroy its entire chemical weapons program under a deal negotiated with the U.S and Russia after hundreds of people were killed in a gas attack in the outskirts of capital, Damascus.