Large freshwater lakes formed in North America and Europe during deglaciation following the Last Glacial Maximum. Rapid drainage of these lakes into the Oceans resulted in abrupt perturbations in climate, including the Younger Dryas and 8.2 kyr cooling events. In the mid-latitudes of the Southern Hemisphere major glacial lakes also formed and drained during deglaciation but little is known about the magnitude, organization and timing of these drainage events and their effect on regional climate. We use 16 new single-grain optically stimulated luminescence (OSL) dates to define three stages of rapid glacial lake drainage in the Lago General Carrera/Lago Buenos Aires and Lago Cohrane/Pueyrredón basins of Patagonia and provide the first assessment of the effects of lake drainage on the Pacific Ocean. Lake drainage occurred between 13 and 8 kyr ago and was initially gradual eastward into the Atlantic, then subsequently reorganized westward into the Pacific as new drainage routes opened up during Patagonian Ice Sheet deglaciation. Coupled ocean-atmosphere model experiments using HadCM3 with an imposed freshwater surface “hosing” to simulate glacial lake drainage suggest that a negative salinity anomaly was advected south around Cape Horn, resulting in brief but significant impacts on coastal ocean vertical mixing and regional climate.