Twenty-seven people have been saved after the boat heading to Indonesia's Batam island capsized early yesterday off southern Johor state, said Mustapa Kamal Abbas, an official with the Malaysian Maritime Enforcement Agency.
He said those rescued included an eight-month-old boy and two other women.
The 35 people on board were believed to be immigrants living illegally in Malaysia who were returning home to Indonesia to celebrate the end of the Muslim fasting month of Ramadan next month.
A woman among those rescued was found unconscious and later pronounced dead.
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Maritime authorities have deployed a ship and a speedboat to search for the seven people still missing, Mustapa said.
The boat set sail late Wednesday before suffering the engine failure.
Boating accidents along Malaysia's coast are common as the relatively affluent country draws thousands of people from poorer regional neighbours such as Indonesia and Myanmar, with many seeking to work illegally.