An Australian contractor working through Iraqi subcontractors provides the food and water at the base in Wasit province, Governor Hamad al-Latif said. He did not identify the Australian firm.
Officials said they were investigating whether the poisoning was intentional.
An official with the Environment Ministry said 11 policemen had died, but the Governor has denied the claims, although he said some of the victims were in critical condition.
An inspector for the Environment Ministry says some of the policemen began bleeding from the ears and nose after the meal at their base in the town of Numaniyah.
"Hundreds of soldiers were poisoned after taking food and water in the iftar," al-Latif said, referring to the meal that breaks the sunrise-to-sunset fast during the Islamic holy month.
"Investigations are underway to determine the cause."
Samples of the food and water were being tested "to determine the substance in them" and will be sent to Baghdad for further tests, said Governor al-Latif.
Sunni insurgents who have targeted police and military forces with bombings and shootings have not been known to use poisoning as a weapon. But the suddenness and severity of the sickness raised speculation that the incident could be a new attack. The division is mainly made up of Shi'ites.
Some of the soldiers collapsed as soon as they stood up from the meal, others fell "one after the other" as they headed out to the yard to line up in formation, said the Environment Minisitry.
Iraqi ambulances and helicopters sent by the US military rushed the policemen to hospitals in Numaniyah and the nearby city of Kut.
The afflicted policemen belonged to the 4th Division of the National Police, nicknamed the Karrar Division after a title of Imam Ali, the most revered Shi'ite saint.
The division normally operates around the town of Salman Pak on the southeastern outskirts of Baghdad -- an area of intense Shi'ite-Sunni killings. The division was sent to the base in Numaniyah, 80 kilometres southeast of the capital, for further training.
AP