The evolutionary model escape from adaptive conflict (EAC) posits that adaptive conflict between the old and an emerging new function within a single gene could drive the fixation of gene duplication, where each duplicate can freely optimize one of the functions. Although EAC has been suggested as a common process in functional evolution, definitive cases of neofunctionalization under EAC are lacking, and the molecular mechanisms leading to functional innovation are not well-understood. We report here clear experimental evidence for EAC-driven evolution of type III antifreeze protein gene from an old sialic acid synthase (SAS) gene in an Antarctic zoarcid fish. We found that an SAS gene, having both sialic acid synthase and rudimentary ice-binding activities, became duplicated. In one duplicate, the N-terminal SAS domain was deleted and replaced with a nascent signal peptide, removing pleiotropic structural conflict between SAS and ice-binding functions and allowing rapid optimization of the C-terminal domain to become a secreted protein capable of noncolligative freezing-point depression. This study reveals how minor functionalities in an old gene can be transformed into a distinct survival protein and provides insights into how gene duplicates facing presumed identical selection and mutation pressures at birth could take divergent evolutionary paths.