Subsurface storage of carbon dioxide (CO(2)) is regarded as a short to medium term solution for reducing greenhouse gas emissions. However, there are concerns with respect to the integrity of seals in subsurface storage of CO(2) and the risks associated with leakage to ocean and atmosphere. In this paper, we report the results of experimental laboratory simulation of CO(2) leakage from subsurface storage sites and the self-sealing mechanism of CO(2) hydrates in subsea sediments, using an experimental setup specifically constructed for this work. The results demonstrate that the sequestrated CO(2) migrated upward and formed hydrates with the pore water in the sediment when the pressure and temperature conditions in the sediments were inside the hydrate stability zone. The CO(2) hydrate formation slowed down the CO(2) diffusion rate by several times to 3 orders of magnitude. The upward migrating CO(2) tended to form hydrate at the base of the hydrate stability zone. On the geological time scale the CO(2) hydrate formation could create a low-permeability secondary cap layer which greatly restricts further upward CO(2) flow, should a leakage occurs. This potential "self-sealing" and "self-healing" process could be an important criterion in the selection of suitable sites for geological storage of CO(2).