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Northern sand lance (Ammodytes dubius) are essential forage fish in most offshore, temperate-to-polar waters on the Northwest Atlantic shelf (NWA), but their population structure and genetic separation from the American sand lance (A. americanus) remain unresolved. We assembled a reference genome for A. dubius (first in the Ammodytidae) and then used low-coverage whole genome sequencing on 262 specimens collected across the species distribution (Mid-Atlantic Bight to Greenland) to quantify genetic differentiation between geographic regions based on single nucleotide polymorphisms. We found strong separation between A. dubius from locations north and south of the Scotian Shelf, largely due to massive genetic differentiation spanning most of chromosomes 21 and 24. Genetic distance increased with geographic distance in the smaller southern cluster but not in the larger northern cluster, where genetic homogeneity appeared across large geographic distances (>103 km). The two genetic clusters coincide with a clear break in winter sea surface temperature, suggesting that differential offspring survival, rather than limited transport, causes a break in realized connectivity. Nuclear and mitochondrial DNA both clearly delineated A. dubius from A. americanus, thereby confirming a species boundary through spatial niche partitioning into inshore (A. americanus) and offshore (A. dubius) sand lance species on the NWA.