The Indonesian passenger ship carrying 243 people was reported missing after losing contact early on Sunday during bad weather, the search and rescue agency said.
The Virgo Transport 8 ship had set sail on Saturday from the East Java city of Surabaya to the South Kalimantan city of Banjarmasin, it said.
The agency said later on Sunday the ship had sunk, without providing further details.
I Putu Sudayana, the head of the agency's Banjarmasin office, said in a video statement 103 people had been evacuated using different ships and some of them would be taken to an East Java port.
Rescuers launched a search, deploying a team, ships and a helicopter toward the passenger vessel's last known position, he said.
Sudayana, who is co-ordinating the search, said the agency was working with maritime authorities and other relevant agencies while closely monitoring weather conditions in the area.
The Japanese-built Virgo Transport 8 is designed to transport both passengers and vehicles.
The ship's manifest said it was carrying 243 people, including 213 passengers and 30 crew members, although it is common in Indonesia for the number of passengers to differ from the manifest.
Indonesia, an archipelago of 17,000 islands, relies heavily on ferries as a key mode of transportation, with sea routes more affordable and available than air travel.
However, safety standards are not always rigorously enforced, resulting in a relatively high accident rate.
At least 211 people were rescued from an Indonesian ferry in August after it caught fire in rough seas near the tourist island of Bali, while one person was found dead and four others remain missing.
The incident happened less than two weeks after another Indonesian ferry, the Mutiara Sentosa 2, caught fire in waters off the main island of Java, leaving at least five people dead.
Sunday's accident comes just four days after a fire that gutted a passenger ferry in the Philippines killed at least 76 people, with more than 10 others still missing.
with AP
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