Thirty-nine migrants were rescued after the vessel sank last afternoon some 40 nautical miles from the Libyan coast, the navy said, adding that the search for survivors continued today.
A frigate and a patrol boat deployed to the scene, backed up by a helicopter and a merchant ship.
An Italian tanker, which has picked up some 700 migrants from stricken vessels in recent days, along with the 10 bodies, is headed towards Sicily where it is expected tomorrow, the navy said.
Thousands of people seeking asylum or a better life in Europe have died in recent years trying to cross the Mediterranean.
Also Read
Warmer weather prompts a surge in migrants each year, and thousands of people -- especially Syrians, as well as Eritreans and others from impoverished sub-Saharan countries, have landed on Italian shores, where processing centres are already saturated, notably in Sicily.
The Italian government says more than 50,000 people have arrived in Italy since the start of the year, equalling the total number for all of 2013.