Some 320 others were rescued when the vessel was intercepted off Libya.
The dead were found in the fishing boat’s hold. It is thought they died after inhaling fumes from the engine, the rescue vessel’s captain said.
European officials say the plight of migrants, almost 250,000 of whom have crossed by boat to the continent this year, is “beyond urgent”.
So far this year, more than 2,000 migrants have died trying to cross the sea to Europe, the UN says.
The BBC’s James Reynolds in Rome, says it has become the world’s most dangerous migrant journey.
The fishing boat was apparently taking on water when it was spotted about 21 nautical miles (39km) off the Libyan coast and south of the Italian island of Lampedusa.
Interior Minister Angelino Alfano said rescuers were “still counting the victims”, but that about 320 people had been rescued. Those rescued included about 10 women, as well as children.
The commander of the naval vessel involved in the rescue said his officers had encountered distressing scenes when they boarded the fishing boat.