Global observations show that the ocean lost approximately 2% of its oxygen inventory over the last five decades 1-3, with important implications for marine ecosystems 4, 5. The rate of change varies with northwest Atlantic coastal waters showing a long-term drop 6, 7 that vastly outpaces the global and North Atlantic basin mean deoxygenation rates 5, 8. However, past work has been unable to resolve mechanisms of large-scale climate forcing from local processes. Here, we use hydrographic evidence to show a Labrador Current retreat is playing a key role in the deoxygenation on the northwest Atlantic shelf. A high-resolution global coupled climate-biogeochemistry model 9 reproduces the observed decline of saturation oxygen concentrations in the region, driven by a retreat of the equatorward-flowing Labrador Current and an associated shift toward more oxygen-poor subtropical waters on the shelf. The dynamical changes underlying the shift in shelf water properties are correlated with a slowdown in the simulated Atlantic Meridional Overturning Circulation 10. Our results provide strong evidence that a major, centennial-scale change of the Labrador Current is underway, and highlight the potential for ocean dynamics to impact coastal deoxygenation over the coming century.