A global ocean general circulation model has been coupled with a dynamic thermodynamic sea-ice model. This model has been spun-up in a 1000 year integration using daily atmosphere model data. Main water masses and currents are reproduced as well as the seasonal characteristics of the ice cover of the Northern and Southern Hemispheres. Model results for the Southern Ocean, however, show the ice cover as too thin, and there are large permanent polynyas in the Weddell and Ross Seas. These polynyas are due to a large upward oceanic heat flux caused by haline rejection during the freezing of sea ice. Sensitivity studies were performed to test several ways of treating the sea-surface salinity and the rejected brine. The impact on the ice cover, water-mass characteristics, and ocean circulation are described.