Sedimentary ancient DNA (sedaDNA) analysis is a promising new approach for reconstructing the impact of past climate and environmental changes on marine paleobiodiversity. By recovering, amplifying, and sequencing taxonomically informative sedaDNA fragments preserved in sediments, it is possible to assess the response of a broad range of eukaryote taxa, including non-fossilizing lineages, to past climate change. Here we present a unique marine derived sedaDNA metabarcoding record, spanning the penultimate glacial-interglacial transition across Marine Isotope Stages 6 to 5d (>135–107 ka) from an Eirik Drift core-site in the Labrador Sea. We identified a range of marine groups including dinoflagellates, diatoms, coccolithophores, chlorophytes, and copepods. There were representatives of primary/secondary producers, grazers, and parasites, which may represent remnants of complex ecosystems and ancient food webs. There were significant biodiversity shifts following the penultimate deglaciation and changing sea ice conditions throughout the Last Interglacial. These shifts reflected the striking increase in community richness during periods of seasonal sea ice and reduction under extensive perennial sea ice cover and open ocean. We identify two potential sedaDNA indicator taxa sequences associated with past seasonal sea ice which are most likely pico-eukaryote representatives of Micromonas and Pyramimonas, both green algae with known sea ice associations in modern ecosystems. Our work demonstrates the importance of high resolution marine sedaDNA metabarcoding for unravelling climate-ecosystem linkages and strengthens the potential of sedaDNA signals for past sea ice reconstructions through indicator sequences.