At least one person was killed while 102 people are still missing. So far 85 passengers have been rescued by a passing ship at the accident site, RIA Novosti reported.
Earlier the emergencies centre reported that about 182 people were on board the ship.
The double-decker cruise ship Bolgaria was en route from the Tatar town of Bolgar to Kazan sank at 13:58 Moscow time (15:28 IST) this afternoon near the village of Syukeyevo in the Kansko-Ustinovsky district of the Republic of Tatarstan, about 750-kilometre east of Moscow.
The vintage ship was built in 1955 in the former Czechoslovakia. Earlier, a special Ilyushin IL-76 transport aircraft with rescuers and divers of the "Lider" group of the Central Rescue Centre (Tsentrspas ) left for Tatarstan, a spokesperson for EMERCOM Minister Sergei Shoigu, said.
Meanwhile, Tatarstan's police have opened a criminal case into the ship's sinking on safety violation charges, Russia's Investigation Committee spokesman Vladimir Markin was quoted as saying by Rossiya24 news channel.
The Investigations Committee's Chief, Alexander Bastrykin, has left for Tatarstan capital Kazan on the orders of President Dmitry Medvedev to establish the cause of the tragedy and find those responsible for the accident.
Russian Tourism Industry Union claimed that unlike other cruise ships used for voyages down, the Volga River was not renovated.
However, transport watchdog said the vessel was in a good technical condition with all necessary certifications. There was "an abrupt sinking of the vessel," it said.
The head of the tourism agency, selling tours on the Volga River, Dmitry Voropayev said the ships similar to Bulgaria do not have internal water-resistant bulkheads which makes them vulnerable to any hole in the hull.
"There were lots of children on board and when the boat started to tilt on a side in heavy rain and strong wind, reported CIS TV 'Mir'.
Most of Russia's largest cities are located along the banks of Volga, a popular tourist destination especially in summer months. It is Europe's largest river and is up to 30 kilometres wide.