Details of the breach cannot be revealed for legal reasons.
But it means that he will have to learn another fake background and be given a new set of documents, including a passport and birth certificate.
He will not be able to return to the town where he was living when he is released from his latest prison sentence.
Venables was given a first new identity in 2001 when he was freed from his life sentence, along with Robert Thompson, for the murder in Liverpool of toddler James Bulger.
The two killers were granted lifelong anonymity around their new identities, such was the concern that they would be attacked.
When Venables, 28, was jailed again last year for internet child sex abuse crimes it emerged that he had been telling some people who he really was.
During the court case it emerged that as an adult Venables had developed drink and drugs problems and had been cautioned by police for cocaine possession.
A judge partially lifted the lifelong gagging order to reveal that he had been living in Cheshire and his latest crimes had been committed in that county.
At that time the Home Office and Probation Service considered giving him a second new identity - along with a detailed history and the documents to support it - but decided against it because of the problems Venables would have dealing with such a big change.
A source said: "We had resisted a new ID because he had lived with the first one for so long and it's very difficult to do that.
"But the new security breach is considered so serious that a new identity is the only answer, because we believe so many people will have learned who he is and it would be impossible to protect him."
Venables is to appear before the Parole Board in a couple of months when a panel will consider freeing him from his latest jail sentence.
He will remain on licence for the James Bulger murder and risk being recalled to prison for any serious bad behaviour.