By late 1598, the Japanese invasion of Korea was collapsing. Toyotomi Hideyoshi, the warlord who had launched the campaign in 1592, died unexpectedly at Fushimi Castle in September, and the Council of Five Elders ordered a full withdrawal. But retreating from a foreign war is its own kind of battle. Konishi Yukinaga, commanding 14,000 troops at the westernmost Japanese fortress in Suncheon, was blocked from escape by the combined Joseon-Ming fleet under Yi Sun-sin and the Chinese admiral Chen Lin. Konishi tried bribery, sending lavish gifts to Chen in hopes the Ming commander would lift the blockade. Chen wavered, but Yi refused. He argued that letting Konishi escape would squander everything the alliance had fought for. On December 15, a relief force of 500 ships carrying 20,000 Japanese troops under Shimazu Yoshihiro massed east of the Noryang Strait, intent on breaking through to rescue Konishi.

The allied fleet waited on the western end of the strait. Yi commanded 82 panokseon warships with 8,000 sailors, while Chen Lin led six large war junks, 57 lighter vessels, and 7,600 Ming fighting men. They were outnumbered by more than three to one, but their ships carried heavier cannon and sturdier hulls. The battle began around two in the morning and immediately became desperate. Korean and Chinese cannon shredded the Japanese fleet at range, but when Chen ordered his ships into close combat, the Japanese fought back with arquebus fire and boarding parties. Chen's own flagship was boarded, and his son was wounded parrying a sword thrust aimed at his father. The Ming commander Deng Zilong rushed to help with two hundred guards in a borrowed Korean panokseon, only to be mistakenly fired upon by Ming ships that failed to recognize the vessel. The disabled ship drifted into the Japanese fleet, and Deng and every man aboard were killed.

By dawn, the allied fleet held the upper hand. Half of Shimazu's ships were sunk or captured. Shimazu himself reportedly clung to wreckage in the icy water before being pulled to safety. As the Japanese remnants fled eastward along the south coast of Namhae Island, Yi ordered an aggressive pursuit. It was during this chase that a stray bullet struck him beneath the left arm. Only three people witnessed his death: his eldest son Yi Hoe, his adjutant Song Hui-rip, and his nephew Yi Wan. They carried the admiral's body into his cabin before anyone else could see. Wan put on his uncle's armor and continued beating the war drum, signaling to the fleet that the flagship was still in the fight. When Chen Lin later called for Yi to thank him for another rescue, he was met instead by Wan, who told him the admiral was dead. Chen collapsed three times, beating his chest and weeping.

Of Shimazu's 500 ships, perhaps 200 made it back to Busan; some Korean records claim as few as 50 survived. Konishi Yukinaga slipped out of his fortress on December 16 by sailing around the southern end of Namhae Island, bypassing the strait entirely. By December 24, the last Japanese ships had sailed for home, ending seven years of devastating war. Yi Sun-sin's body was carried back to his hometown of Asan and buried beside his father. The court awarded him the posthumous rank of Minister of the Right. In 1643, he received the title chungmugong, meaning duke of loyal valor. Chen Lin attended Yi's funeral and delivered a eulogy before withdrawing to China, where he received high military honors. A British vice admiral, George Alexander Ballard, would later write that not even Nelson, Blake, or Jean Bart could have accomplished more than this scarcely known representative of a small and cruelly oppressed nation. The strait where he fell remains one of the most storied waters in East Asian history.