The bodies were found dumped at an orchard near the town of Hamza, just south of provincial capital Hilla, the source told Xinhua on condition of anonymity.
The dead were blindfolded and handcuffed with bullet holes in their heads and chests, the source said, adding that the authorities have launched an investigation into the mass killing.
Iraq has been struggling with some of the worst violence in years. About a month ago, armed insurgents, spearheaded by the militant al-Qaeda breakaway group the Islamic State, launched a surprise offensive on Iraqi security forces.