Pasand Khan Buledi, commissioner of Makran division, says a large group of armed men attacked a labour camp near the dam construction site in the Gobdan area of Turbat district early on Saturday.
Buledi said 16 of the dead were from Pakistan's Punjab province and four were from Sindh province. He said the eight guards, all from Balochistan, were unharmed in the attack.
Buledi also said that the attackers overpowered the eight security guards, shot the sleeping labourers and fled.
No group has claimed responsibility for the attack.
Sarfaraz Bugti, Balochistan home minister, told private satellite news channel Geo TV that Pakistan's paramilitary Frontier Corps was searching in the nearby mountains for the attackers.
"We will chase them down and bring them to justice,'' he said. "We need help in this war against terrorists. Alone, we cannot fight.''
Jan Mohammad Buledi, a provincial spokesperson, said the government would offer the families of the deceased nearly $10,000 each.
Balochistan is the scene of a low-intensity insurgency by nationalist and separatist Baloch groups who want substantial share of revenue from gas and mineral resources and complete autonomy from Islamabad.
Saturday's violence was the deadliest recent attack to target civilians in the region.
In September 2012, 10 labourers and five tribesmen in a labour camp were shot to death in Balochistan's Khuzdar district.
Source: Agencies