On its UK website, Samsung wrote: "Based on our investigation, we learned that there was an issue with the battery cell. An overheating of the battery cell occurred when the anode-to-cathode came into contact, which is a very rare manufacturing process error".
An Australian man was left with burns when his Samsung Note 7 "exploded" as he slept in his hotel room.
Tham Hua, from Victoria state who was visiting Western Australia, said his Galaxy Note 7 exploded in his hotel room, bursting into flames.
"My brand new Note 7 exploded this morning while I was still asleep, it was plugged in and charging," Hua posted on a technology forum.
"Phone completely fried... (Samsung) told me this is the first case in Australia. (It) charred the hotel room bed sheet and the carpet when I whacked it down to the floor, burnt one of my fingers while doing that too," Hua added.
According to the new Samsung statement, "although this is isolated to a battery cell issue, we are prioritising the safety of our customers first, so we are voluntarily replacing Galaxy Note7 devices with a new one".
"While we have found a low risk probability of the issue occurring, at Samsung we believe that your safety is paramount and we would prefer you not to take any risks. We encourage Galaxy Note 7 consumers to take advantage of the exchange programme," it added.
According to media reports, the faulty batteries came from Samsung's own subsidiary SDI.
"As a follow-up of the battery issue, we decided to temporarily stop using Samsung SDI's battery for Galaxy Note 7," the Korean Herald reported, citing sources from Samsung Electronics.
Samsung SDI is reported to have supplied around 70 percent of batteries used in the Galaxy Note 7.
Concerned over the growing battery explosion fears, the US Federal Aviation Administration (FAA) has issued a warning not to charge or switch on Note 7 on board aircraft.
"In light of recent incidents and concerns raised by Samsung about its Galaxy Note 7 devices, the Federal Aviation Administration strongly advises passengers not to turn on or charge these devices on board aircraft and not to stow them in any checked baggage," the FAA said in a statement on Friday.
The strong warning came at a time when the south Korean giant is dealing with the global recall of nearly 2.5 million Galaxy Note 7 shipped so far across the world.
Three Australian airlines have already barred passengers from using or charging the smartphones during flights.
"Qantas and Virgin Australia have told passengers not to turn on Note 7 or charge them on flights," NBC News reported.