"The rescue operations are finished, everyone is onboard, but we have five dead," spokeswoman Veronica Alfonsi told AFP.
"Among the survivors, we have two infants and five children, and two pregnant women. The conditions are not fantastic, we're assisting them, but we'll need medical evacuations."
The rescuers had to jump in the water to help after the overcrowded rubber dinghy sank off the coast of the Libyan town of Sabratha, not far from the Italian island of Lampedusa.
Open Arms had on Tuesday rescued a further 88 people, Alfonsi said, adding: "The sea conditions are fine right now and this is the reason why there are so many boats out there. "
The humanitarian vessel is the only one operating in the Mediterranean right now, with others run by NGOs held for various reasons in Italian ports.
This year has seen a resurgence of boats in the central Mediterranean, a well-trodden but often deadly route for those hoping to travel to Europe, mainly embarking from Libya and neighbouring Tunisia.
More than 20,000 migrants have died in the last seven years, according to the UN refugee agency.