"The bodies were reported by employees of a beach resort" near the island's second largest city Catania at dawn, a port official said.
Investigators said the boat was carrying around 120 people including women and small children.
"We are transferring the other passengers from the little fishing boat they were in. We assume they are all Syrians," he said, adding that they included women and small children. He did not know where they had set sail from.
Frogmen were searching around the stricken vessel for other possible victims.
Another group of about 100 migrants, mostly Syrian families, were rescued overnight Wednesday off the coast of Calabria on the Italian mainland.
They had left Syria two weeks earlier and had to change boats several times before being left adrift aboard an 11-metre vessel.
Improved weather and calmer waters have seen a spike in boat people arrivals in recent days.
But shipwrecks are frequent because the boats are often old, rickety and overloaded. Human traffickers regularly abandon their passengers when Italian or Maltese coastguards spot them.
