The emergence of a third wave of COVID-19 infection in Malaysia since September 2020 has led to imminent changes in public health prevention and control measures. As high as 96.2% of registered COVID-19 cases and 88.5% of confirmed deaths in Malaysia occurred during this third wave of infection. A phylogenomic study on 258 SARS-CoV-2 full genomes from February 2020-February 2021 has led to the discovery of a novel Malaysian lineage B.1.524. This lineage contains another spike mutation A701V that co-exists with the D614G spike mutation that was predominant in most of the third-wave clusters. The study provides vital genomic insights on the rapid spread of the SARS-CoV-2 variants in Malaysia in conjunction with the presence of a dominant SARS-CoV-2 lineage during the third wave of COVID-19 infection.