The coastguard recovered the bodies of the children, aged from one to four, from the inflatable dingy while another 19 migrants, all wearing life jackets, were rescued, the Dogan news agency reported.
The boat had set off from northwestern Turkey for the Greek island of Lesbos, it said.
There has been a sharp spike in the numbers of migrants and refugees setting out from Turkey for the European Union in search of better lives.
Most are fleeing conflict and misery in Syria, Afghanistan, Pakistan and Africa.
At least 22 migrants, among them 13 children, also drowned overnight when two boats sank off the Greek islands of Kalymnos and Rhodes.
Despite worsening weather at the onset of winter that has made the already hazardous sea voyage from Turkey to Greece even more dangerous, a record 48,000 refugees and migrants arrived last week in Greece, the International Organization for Migration said.