We propose a novel many-body framework combining the density matrix renormalization group (DMRG) with the valence-space (VS) formulation of the in-medium similarity renormalization group. This hybrid scheme admits for favorable computational scaling in large-space calculations compared to direct diagonalization. The capacity of the VS-DMRG approach is highlighted in ab initio calculations of neutron-rich nickel isotopes based on chiral two- and three-nucleon interactions, and allows us to perform converged ab initio computations of ground and excited state energies. We also study orbital entanglement in the VS-DMRG, and investigate nuclear correlation effects in oxygen, neon, and magnesium isotopes. The explored entanglement measures reveal nuclear shell closures as well as pairing correlations.