Many are still missing, according to witnesses, and the coastguard has launched a search operation on Saturday assisted by vessels and aircraft.
An Italian frigate and helicopters were operating at the site, with more ships heading to the area.
In separate incidents on Saturday, a Malta-flagged cargo vessel rescued 47 migrants from a boat sailing about 40 nautical miles (74km) off Gavdos, while a tanker rescued another 88 people some 28 nautical miles (52km) off the island.
According to initial information, coastguard officials believe the boats left together from Libya.
Greece received nearly one million migrants from the Middle East, Africa and Asia in 2015-2016, most of whom took the dangerous route of crossing the sea on inflatable dinghies.
Similar shipwrecks off Crete and Gavdos, which are relatively isolated in the central Mediterranean, have increased over the past year.
According to the Ministry of Migration, Greece has seen a 25-percent increase this year in the number of people entering, fleeing war and poverty, with a 30-percent increase to Rhodes and the southeast Aegean.
Several similar deadly accidents have struck in recent weeks.
In late November, eight people, six of them minors, died north of the island of Samos, on a route frequently used by people smugglers.
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