However Ukerewe District Commissioner Colonel Lucas Magembe said the final death toll could be more than 200, and local officials believed there could have been 300 aboard.
A spokesperson confirmed 40 people had died in the tragedy - with the number expected to rise.
The MV Nyerere went down in the Ukurewe district of Tanzania's Mwanza region, and a rescue operation was launched.
Locals joined emergency teams in rescue efforts.
- It is not clear how many people were on board when the ferry left the island because the ticketing officer was among those who perished in the afternoon disaster.
In 1996, in one of the worst maritime disasters, more than 800 people died when MV Bukoba, ferrying passengers and cargo between Bukoba and Mwanza, capsized.
Regional Commissioner Adam Malima told reporters: "We pray to God to give us hope in such an accident".
Spokeswoman Theresia Mwami denied there being any mechanical problems as the company had carried out heavy maintenance on the ferry in recent months, including two new engines.
Lake Victoria is Africa's largest lake by area, and the world's second largest fresh water lake by surface area, after Lake Superior in North America.
Some of the deadliest have occurred in Tanzania, where passenger boats are often said to be old and in poor condition.
In 2012, 145 people died in a ferry disaster in Tanzania's semi-autonomous archipelago of Zanzibar, in the Indian Ocean, on a vessel that was overcrowded.
Suge Knight sentenced to 28 years for 2015 fatal hit-and-run
'America's Got Talent' - Waiting for a victor
Emilia Clarke Gets Dragon Tattoo in Honor of 'Game of Thrones'!
The main reasons why your bet can loose
Ecclestone wants Formula 1 to Adopt Premier League Revenue Distribution Model
Meghan Markle’s mom Doria attends first royal event since wedding
Kavanaugh Accuser Wants to Testify Next Week, Her Lawyers Say
Baker Mayfield completes first pass of his National Football League career
Nokia 6.1 Plus flash sale today on Flipkart at 12PM
IPhone XR release was pushed back as Apple prioritized XS production
NASA planet hunting probe shares first image
Real Money Casino Apps becoming more and more popular
Jogger Stabbed To Death While On Nightly Run
Yusaku Maezawa booked all seats on SpaceX moon shot. Who is he?
Trump declassifies secret documents to expose bad things
Some Wimbledon Players Aren't Happy With Nike Outfits
Multiple dead in US warehouse shooting