During March 2017, a neonatal patient with severe diarrhoea subsequently developed septicaemia and died, with Klebsiella isolated as the causative microorganism. In keeping with infection control protocols, the coincident illness of an attending staff member and three other neonates with Klebsiella infection triggered an outbreak response, leading to microbiological assessment of isolates collected from the staff member and all 21 co-housed neonates. Multilocus sequence typing and genomic sequencing identified that the isolates from the 21 neonates were of a new Klebsiella sequence type, ST2727, and taxonomically belonged to K. quasipneumoniae subsp. similipneumoniae (formerly referred to as KpIIB). Genomic characterization showed that the isolated ST2727 strains had diverged from other K. quasipneumoniae subsp. similipneumoniae strains at least 90 years ago, whereas the neonatal samples were highly similar with a genomic divergence of 3.6 months. There was no relationship to the Klebsiella isolate from the staff member. This demonstrates that no transmission occurred from staff to patient or between patients. Rather, the data suggest that ST2727 colonized each neonate from a common hospital source. Sequence-based analysis of the genomes revealed several genes for antimicrobial resistance and some virulence features, but suggest that ST2727 is neither extremely-drug resistant nor hypervirulent. Our results highlight the clinical significance and genomic properties of ST2727 and urge genome-based measures be implemented for diagnostics and surveillance within hospital environments. Additionally, the present study demonstrates the need to scale the power of genomic analysis in retrospective studies where relatively few samples are available.