Samples taken over the weekend at a dozen sites in the northwestern provinces of Zambezi and Chavuma, near the border with Angola, confirmed gas and oil residues in the southern African country.
The announcement of the discoveries was contained in a statement from the office of Levy Mwanawasa, Zambia’s president, who visited the area on Sunday.
"The microbial analysis showed that 12 sites were positive for oil and six for gas," Mwanawasa was quoted as saying during his field trip.
"These results confirm the presence of oil and gas in the sub-surface of the two districts of Chavuma and Zambezi," Mwanawasa added.
Following the discovery, Mwanawasa appointed a special cabinet committee headed by Kalombo Mwansa, mines minister, to draw up policies and guidelines to facilitate oil and gas exploration by private companies.
"It is hoped that the country will see more exploration and extraction activities for oil and gas in different parts that would strengthen the country's economy," Mwanawasa said.
Zambia has previously looked to its copper reserves as the main source of foreign currency.
Mwanawasa said exploration companies will determine the oil and gas reserves from the two districts before expanding the exercise to other parts of the country.
"This will be a long-term investment which will require a lot of money"
Charles Hanyika, Uti-Link Energy-Risk Consultancy
The exploration was initially started in 2004 following prolonged fires that affected the areas, which prompted the government to launch an investigation.
The size of the reserves is still unknown but authorities hope that they can become a significant source of revenue in a country where around two-thirds of the population live on less than a dollar a day.
Neigbhouring Angola is experiencing an economic boom as a result of its oil reserves and it is now the second-largest oil exporter in sub-Saharan Africa after Nigeria.
A Zambian energy risks consultant said the discovery of oil and gas was potentially a major boost to Zambia's economy but he warned that investors would have to make substantial investment for a worthwhile return.
"This will be a long-term investment which will require a lot of money," said Charles Hanyika, who runs the Uti-Link Energy-Risk Consultant firm.
Hanyika cautioned against overexcitement until the size of the reserves is clarified.
"It's obviously good news for Zambia but we need to wait for the exploration. The excitement should come after we know the size of the reserves," he said.
Zambia's northwestern region is becoming the country's economic mainstay following the recent huge foreign investment at Lumwana Mines, which has one of the world's largest reserves of copper ore.