At least two crew members were killed and another two are missing according to the Suez Canal Authority. At least six of the crew were also injured.
A Canal Authority official said the cause of the sinking in the waterway, an important international trade route and the fastest link between Europe and Asia, was not immediately known.
The sinking was the latest in a string of Egyptian transport accidents
Last month, 58 people were killed in the Nile Delta town of Qalyoub when two commuter trains collided in Egypt's worst railway accident in four years.
A day later, 11 Israeli Arab tourists were killed in a bus accident in the Sinai Peninsula.
More than 1,000 people were killed in February when a ferry sank in the Red Sea.
Investigations primarily blamed the captain, who died, for not following safety procedures.
But public outrage was directed at the ferry owner, a member of parliament.
The Suez Canal is a major source of foreign exchange earnings for the Egyptian government. Egypt nationalised the waterway in 1956.