Indonesia's Metro television put the number on board at more than 500 and some reports said the figure may have been as high as 850.
Rescuers were trying to locate the ship's position by helicopter, and three navy vessels and one police ship were involved in rescue efforts, he said.
Simamora said the ship, Senopati, sank in the Java Sea near Central Java.
Ships and ferries are a popular means of transport among Indonesia's 17,000 islands, where sea connections are cheaper and more available than air routes.
However, safety standards are not strictly enforced, and vessels often carry passengers not listed on the official manifests.