A parameterization of the impact of internal waves on momentum transfer at the sea-ice–ocean interface based on previous work by McPhee has been implemented in a sea-ice model for the first time. The ice–ocean drag from internal waves is relevant for shallow mixed layer depth and the presence of a density jump at the pycnocline and is also a function of the strength of the stratification beneath the ocean mixed layer and geometry of the ice interface. We present results from a coupled sea-ice–ocean model where the parameterization of internal wave drag has been implemented. We conducted simulations spanning the years from 2000 to 2017. We find a deceleration of ice drift by 5–8% in both winter and summer, but with significant spatial and temporal variation reaching seasonal average values of ~10%. The spatial variation of ice transport leads to local impacts on deformed ice of magnitude ~0.05 m (2–5%), and reductions in ocean-to-ice heat fluxes of ~1 W m−2, and a decrease in bottom melt of ~0.02–0.04 cm d−1. There is an increase of up to 15% in thickness and ice concentration in the Canadian Arctic and a 10% overall impact on the total sea-ice volume.