The attack happened overnight in Sabon Gari in remote Borno state, which has been the epicentre of an Islamist insurgency by Boko Haram and its Islamic State West Africa Province (ISWAP) offshoot rival since 2009.
More than 40,000 people have been killed and nearly two million others forced to flee their homes.
"The death toll runs into dozens," said Ibrahim Liman, a member of the Civilian Joint Task Force militia that helps the Nigerian military against the militants.
"More bodies are still at the base while many soldiers are missing," he added.
Liman said 20 bodies, including those of five soldiers and 15 construction workers, and local hunters were taken to the general hospital in the nearby town of Biu.
Bukar Yamta Ali, secretary of a local hunters' group in Yamarkumi, near Biu, and two nurses at Biu hospital confirmed they had recovered bodies and wounded from Sabon Gari.
The victims were working on a road bridge that was destroyed last year in another jihadist attack, and were returning to their base when they were attacked.
Military and militia sources said on Tuesday that at least nine Nigerian soldiers were killed in an ISWAP ambush near Damasak near the border with Niger last week.
ISWAP emerged from a split with Boko Haram in 2016 and primarily targets Nigerian security forces, although civilians in the region have been caught up in the violence.
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