In the Lake Superior region of North America, deposition of most banded iron formations (BIFs) ended abruptly 1.85 Ga ago, coincident with the oceanic impact of the giant Sudbury extraterrestrial bolide. We propose a new model in which this impact produced global mixing of shallow oxic and deep anoxic waters of the Paleoproterozoic ocean, creating a suboxic redox state for deep seawater. This suboxic state, characterized by only small concentrations of dissolved O2 (~1 μM), prevented transport of hydrothermally derived Fe(II) from the deep ocean to continental-margin settings, ending an ~1.1 billion-year-long period of episodic BIF mineralization. The model is supported by the nature of Precambrian deep-water exhalative chemical sediments, which changed from predominantly sulfide facies prior to ca. 1.85 Ga to mainly oxide facies thereafter.