The dead bodies washed up on or near to the shores of Steccato di Cutro, a seaside resort town in the southern Italian region of Calabria.
Vigili del Fuoco, Italy's national fire and rescue brigades, said searches were ongoing via boat, jet ski and helicopter. They also reported pulling around 80 survivors out of the sea.
The ship reportedly carried over 150 refugees, including many children, when it began experiencing difficulties. It broke up on hitting beneath-the-surface rocks in rough weather off the Calabrian Coast.
The tweet reads, "Migrant shipwreck. Another body recovered in Steccato di Cutro."
The passengers were mainly from Iran, Pakistan and Afghanistan. Government officials are expected to make a formal announcement about Sunday's developments on Monday.
According to the United Nations High Commissioner for Refugees, the number of migrant arrivals to Italy had increased each of the last four full years: from a low of around 11,500 in 2019 to more than 34,000 in 2020 to around 67,500 in 2021, and just over 105,000 last year.
But the figures are all below all-time highs of more than 250,000 per year a decade ago. Arrival figures were held low by strong anti-migrant policies in 2018 and 2019 and then by the COVID-19 pandemic starting in 2020.
Many would-be refugees die or go missing trying to reach Italy's shores yearly. According to UN data, 1,368 died or went missing on their way to Italy by sea last year, down slightly from 1,545 in 2021.
Over 3,000 refugees have died in 2016 trying to cross the Mediterranean, a 50% increase from last year... pic.twitter.com/KZpSXtdvML