The announcement by Prime Minister Ibrahim al-Jaafari on Tuesday came two days after US troops surrounded and took control of an Interior Ministry building in the Baghdad neighbourhood where the detainees were found.
"I was informed that there were 173 detainees held at an Interior Ministry prison and they appear to be malnourished. There is also some talk that they were subjected to some kind of torture," al-Jaafari told reporters.
Al-Jaafari said an investigation had begun.
An Iraqi Interior Ministry official also said on Monday that an investigation would be opened into allegations that ministry officers tortured suspects detained in connection with the country's ongoing fight against the foreign military presence in the country.
Al-Jaafari said the detainees were moved into a better location and "medical care will be given to them".
The Interior Ministry is controlled by the majority Shia. Sunni leaders have accused Shia-dominated security forces of detaining, torturing and killing hundreds of Sunnis simply because of their religious affiliation.
The prime minister did not say where the prison was located, but Major General Hussein Kamal, the Interior Ministry's undersecretary for security, said it was in the basement of a building in Baghdad's neighbourhood of Jadriya.
Amnesty International welcomed al-Jaafari's decision to order an investigation, but urged him to expand the inquiry to include all allegations of torture. Amnesty also asked him to make the results public.
Raghib, a Sunni, was detained and
tortured by Iraqi forces
"There have been many reports of torture and maltreatment of Iraqi detainees by the police and security forces belonging to the Ministry of Interior such as the Wolf Brigade," spokeswoman Nicole Choueiry said.
"Amnesty International recently received information of four people who were tortured while detained by Iraqi security forces."
A former Iraqi detainee told Aljazeera.net that sectarianism was the real motive behind the torture in the prisons of the Iraqi Ministry of Interior.
"I was detained without charge. I was tortured and my guards used to tell me that Sunnis are out of power now and we (Shia) have to take revenge on you," Umar Raghib said.
Raghib said he left Iraq after his release.
Late on Sunday, US troops surrounded and took control of the Interior Ministry building in Jadriya after repeated allegations that Iraq security forces were illegally detaining and torturing people suspected of participating in attacks by groups opposed to the US-led forces.
The US military declined comment on the incident and referred all questions to the Iraqi Interior Ministry.
Sunni groups say Interior Ministry
forces are targeting them
US officials have been encouraging Sunni Arabs to take part in next month's parliamentary elections, hoping that a strong turnout by the disaffected minority could help ease sectarian tensions, calm the armed opposition to US military in Iraq and the US-backed Iraqi government, and speed the day when foreign troops could go home.
Al-Jaafari did not say whether US troops were involved in finding the centre.
Al-Jaafari said one of his deputies would be heading a committee that would include some ministers and would investigate what had happened. The committee would finish its work within two weeks, al-Jaafari said.
"They should investigate how this happened and how it reached this point," al-Jaafari said.