The Sudan Media Centre said three migrants were rescued. The boat had launched from Red Sea State, one of Sudan's 26 states, and sailed for four hours in Sudanese territorial waters before the blaze broke out, according to the news agency.
Local authorities were still searching for possible survivors, it said. The report could not be independently confirmed.
The report said that the planning and execution of the illegal migrant smuggling effort took place in Port Sudan, a main port in the impoverished country. Port Sudan is the capital of the Red Sea State. The agency also said that the boat sank south of Sawaken, which is at the south tip of the Red Sea state.
The report said the owners of the boat, all Yemenis, have been arrested, although it gave no more details about them.
A second attempt to smuggle 247 migrants, mostly from Chad, Nigeria, Somalia and Eritrea, also was uncovered in the same state, the report said, without elaborating.
Human trafficking is rife in Sudan as smugglers use locally manufactured boats and take advantage of lawless areas in the conflict-ridden country.