The new ward, opened just three months ago, contained 70 beds.
Prime Minister Mustafa al-Kadhimi chaired an emergency meeting in the wake of the fire and ordered the suspension and arrest of the health director in Dhi Qar, as well as the director of the hospital and the city's director of civil defence. A government investigation was also launched.
In the nearby Shiite holy city of Najaf, mourners prepared to bury some of the victims.
It was the second time a large fire killed coronavirus patients in an Iraqi hospital this year. At least 82 people died at Ibn al-Khateeb hospital in Baghdad in April, when an oxygen tank exploded, sparking the blaze.
That incident brought to light widespread negligence and systemic mismanagement in Iraq's hospitals. Doctors have decried lax safety rules, especially around the oxygen cylinders.
On Monday, Ammar al-Zamili, spokesman for the Dhi Qar health department, told local media that there were at least 63 patients inside the ward when the fire began. Maj. Gen. Khalid Bohan, head of Iraq's civil defence, said in comments to the press that the building was constructed from flammable materials and prone to fire.
Iraq is in the midst of another severe Covid-19 surge. Daily coronavirus rates peaked last week at 9000 new cases. After decades of war and sanctions, Iraq's health sector has struggled to contain the virus. More than 17,000 people have died of the virus among 1.4 million confirmed cases since the start of the pandemic.