The boat carrying Egyptian, Syrian and African migrants capsized off the coast of Kafr al-Sheikh.
In a statement, the health ministry said that at least 42 people drowned.
Around 158 people have been rescued and rescue workers are looking for more survivors. About 400 could still be missing.
There were no details about the destination of the boat, although officials said the boat was probably heading for Italy.
Egyptian Prime Minister Sherif Ismail said all resources possible would be directed into the rescue mission and that those responsible had to be brought to justice.
He had affirmed that Egypt will combat illegal immigration through updating already existing anti-human trafficking legislation, underlining that the government is currently working on finalising legalisation to combat illegal emigration from the country.
However, in recent years, several people from different strife-hit countries tried to find illegal methods to escape from their countries and head to Europe in order to find better life.
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