This is according to a spokesman for the Libyan navy on Saturday.
Migrants have been streaming out of North Africa in rickety boats in rising numbers for years. So far in 2014, the total number reaching Italian shores has passed 100,000, the Italian government said this week.
"The coast guards have rescued 17 of the illegal migrants," navy spokesman Ayoub Qassem said. A search for the rest of the passengers was underway, he added.
The boat sank near Qarabouli, east of Tripoli, a common launchpad used by human traffickers smuggling people to Europe, Qassem said.
Italy has borne the brunt of patrolling the Mediterranean Sea to help prevent major tragedies involving migrants. More than 70,000 people have been rescued through the "Mare Nostrum" (Our Sea) mission of patrols which Italy began last October.