An MSF ship patrolling the central Mediterranean came to the rescue of two dinghies that were sailing close together and managed to pull 209 people, including 50 children, to safety.
However, 22 migrants were found dead at the bottom of the first dinghy, lying in a pool of fuel.
"It is still not entirely clear what happened, but they died a horrible death. It is tragic," said Jens Pagotto, MSF Head of Mission for Search and Rescue Operations.
"It seems that water and fuel mixed together and the fumes from this might have been enough for them to lose consciousness," he told Reuters by telephone.
The survivors, most of them from West African states such as Nigeria and Guinea, were being brought to Sicily along with the dead and were due to reach the port of Trapani on July 22.
Italian authorities have reported a jump in the number of migrants who have left Libya this week on overcrowded boats in search of a better life in Europe, as people smugglers take advantage of calm seas and hot summer weather.
More than 2,500 people were rescued on July 19 and one body was recovered, Italy's coast guard said. Almost 600 people were saved on July 20.
