The ship is believed to have been carrying migrants.
The incident occurred in international waters about 60 nautical miles south of Lampedusa, Italy, according to a posting on the Armed Forces of Malta Facebook page.
Malta's military Rescue Coordination Centre has assumed control of what it called a "major search and rescue incident," according to the Facebook posting.
According to the Maltese military, the ship was being followed by military chase planes and "appeared unstable."
"A few minutes later, the aircraft reported that the boat had capsized and that numerous persons were in the water. Initial assistance was provided by the aircraft, which dropped a life raft in close proximity of the persons in distress," according to the Facebook posting.
The fate of those aboard the capsized ship was not immediately clear.
It is the second such incident this month in the region.
Earlier this week, a boat carrying more than 500 African migrants sank off the coast of Lampedusa, killing 309 people in what Lampedusa Mayor Giusi Nicolini called "the biggest sea tragedy in the Mediterranean Sea since World War II."
That ship originated in Libya, caught fire off the Italian coast and sank.
Survivors, many of them from Eritrea, told CNN they used bodies to keep themselves afloat until they were rescued.
The incident sparked calls for efforts to reform migration policies in the region.
A week ago Friday, the United Nations' human rights office urged the European Union to work to prevent another such incident.
The agency called on authorities to work to reduce migrant trafficking and address economic and security issues that have driven thousands of African residents to make the risky voyage to Europe in search of a better life.
MIGRANT BOAT SINKS 10 DEAD, EXCEPT 200IN
In the Strait of Sicily, a boat full of migrants sank. On board were about 250 people. At least a dozen dead, as confirmation that the Navy with ships and helicopters took part in the rescue. The survivors rescued so far are 200, about 150soccorsi by Maltese vessels and about 50 from Italian means, including ten children.
The tragedy occurred in Maltese waters, on the border with Libya, 70 miles from Lampedusa, where a week ago died 339 refugees.
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