"The 27 men now on board the Argos were on board a boat carrying 130 people. They are the only survivors. This tragedy is just unbearable," MSF said in a tweet. Along with the 27 survivors the Bourbon Argos ship also recovered seven bodies.
Departures from Libya are continuing unabated despite worsening weather in the Mediterranean, with more than 3,200 people rescued from crowded and unseaworthy dinghies since Saturday.
The latest tragedy raises the death toll from migrant boat sinkings to over 340 people this week.
Over 167,000 people have been brought to safety in Italy since the start of the year, according to the interior ministry.
The figure has already passed the 153,000 number recorded in 2015 and is closing in on the 170,000 figure recorded in 2014.