"So far about 250 people have been rescued, based on the first data," coastguard spokesman Nikos Lagkadianos told Skai TV, adding that weather conditions were good.
He said it was not clear how many were aboard the vessel but that based on a first assessment it was unlikely to have carried many more than those rescued so far.
Fleeing war, thousands of mainly Syrian refugees have braved rough seas this year to make the short but precarious journey from Turkey to Greece's islands, from which most continue to mainland Greece and northward into wealthier western Europe.
However, Crete, Greece's southernmost island, lies north of Libya and Egypt. A group of 113 mostly Afghan migrants has landed on the island on Wednesday, the first big arrival on the island since the migrant crisis began.
Warm weather and calmer seas in the Mediterranean have led to a surge in recent weeks in the number of people trying to cross to Italy from Libya, where people-smugglers operate with relative impunity.
Boats on this much longer journey risk being blown off course to islands such as Crete