Sri Lanka's navy says it has rescued 32 Myanmar nationals whose wooden vessel began sinking while making a perilous journey to Australia.

A navy statement says the rescue was made about 250 nautical miles off the island's eastern coast on Saturday. Those rescued are being treated for acute dehydration.

The group comprising 31 adult males and a boy had been at sea without food for 21 days when the navy rescued them after being informed by a local fishing boat.

Survivors have told local newspapers that there were 130 passengers at the beginning of the journey and 98 died on the way and their bodies were dumped to sea.

They said they were planning to go to Australia after their attempt to enter Malaysia failed.