95 Z strange cooling issue

Hey guys I have a 95 Z28 with LT1 and lets say I'm cruising through town after maybe 15 minutes of driving 60 miles an hour or so my water temp will rise to around 215 maybe 220 and my service engine light will come on along with my cooling fans. When these both happen my water temp gauge drops dramatically back down to 160. I can shut the car off and turn back on after 10 seconds and the light will be off and the fan wont be running. Just curious to what this problem could be. maybe just a bad sensor....I guess im not good with that stuff. I would like to get fixed though as the fans are rather loud when running and powering down. Thanks for any words of advice guys

Have you checked your coolant level? This could be an air pocket caused by loss of coolant, could also be a sticking thermostat. I would get a cooling system pressure tester, that would tell you if you have a leak or not.