The toll was likely to go up, John Mongella, commissioner for the Mwanza region, told The Associated Press after dozens of security forces and volunteers resumed work at daybreak.
However, hopes were fading for more people to be pulled out of the water alive. It was one of the the worst ferry disasters of the last century.
Exact figures are yet to be confirmed as locals joined hands with emergency teams in rescue efforts.
It has a capacity of 100 passengers and about 25 tonnes of cargo.
The ferry may have capsized when passengers moved to one side as it prepared to dock, some reports suggested.
The Tanzania Electrical, Mechanical and Electronics Services Agency, in charge of servicing the vessels, urged patience as rescue efforts began.
A general view of MV Nyerere.
A senior local official said the final death toll could be more than 200, after it emerged the vessel was overcrowded at the time.
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"What we also know from witnesses that the ferry appeared to be overloaded. We have repeatedly denounced this negligence", said John Mnyika, deputy secretary general of Chadema, the main opposition party.
Search and rescue set to resume today.
In 1996, a ferry tragedy in the same area of Lake Victoria killed at least 500 people.
What caused the ferry to capsize is not yet known but accidents on Lake Victoria, the largest lake in Africa, are common.
"There were more than a hundred passengers on board when the ferry sank, it is feared that a significant number have lost their lives", said George Nyamaha, the head of Ukerewe district council.
Military and locals carry bodies from the capsized ferry on September 20, 2018.
And in March 2012, only two survivors were found after a boat believed to be carrying around 60 people capsized on the lake in Uganda.