"The Russian Tolstoy cargo ship flying the North Korean flag sank about 04.00 local time 10-15 miles off the Bulgarian coast," Darik Radio quoted Minister of Transport Petar Mutafchiev as saying.
The ministry said that the crew reportedly comprised 13 members, including a Russian captain and they are all considered missing.
Bulgarian and Russian sea search-and-rescue teams, including a Bulgarian military helicopter, are attempting to find the survivors, but the rescue operation is hampered by bad weather.
A Bulgarian Navy frigate is expected to join the rescue effort later on Sunday.
Darik Radio said the 138-meter-long cargo vessel was carrying scrap metal from Rostov-on-Don in Russia to Nemrut in Turkey.
The ship has reportedly been in service for 37 years and was recently cited for numerous technical problems.