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Arapaima gigas is one of the largest freshwater fish species of high ecological and economic importance. Overfishing and habitat destruction are severe threats to the remaining wild populations. By incorporating a chromosomal Hi-C contact map, we improved the arapaima genome assembly to chromosome-level, revealing an unexpected high degree of chromosome rearrangements during evolution of the bonytongues (Osteoglossiformes). Combining this new assembly with pool-sequencing of male and female genomes, we identified id2bbY, a duplicated copy of the inhibitor of DNA binding 2b (id2b) gene on the Y chromosome as candidate male sex-determining gene. A PCR-test for id2bbY was developed, demonstrating that this gene is a reliable male-specific marker for genotyping. Expression analyses showed that this gene is expressed in juvenile male gonads. Its paralog, id2ba, exhibits a male-biased expression in immature gonads. Transcriptome analyses and protein structure predictions confirm id2bbY as a prime candidate for the master sex-determiner. Acting through the TGF beta signaling pathway, id2bbY from arapaima would provide the first evidence for a link of this family of transcriptional regulators to sex determination. Our study broadens our current understanding about the evolution of sex determination genetic networks and provide a tool for improving arapaima aquaculture for commercial and conservation purposes.