The northeastern part of the North Atlantic subpolar gyre is a key passage for the Atlantic Meridional Overturning Circulation upper cell. To this day, the precise pathway and intensity of bottom currents in this area have not reached a consensus. In this study, we make use of regional high resolution numerical modeling to suggest that the main bottom current flowing south of Iceland originates from both the Faroe-Bank Channel and the Iceland-Faroe Ridge (with about equal contributions) and then flows along the topographic slope centered. When flowing over the rough topography, this bottom current generates a bottom mixed layer reaching 200 m height. We further demonstrate that many submesoscale structures are generated at the southernmost tip of the Icelandic shelf, thus spreading water masses in the open Iceland Basin. These findings have major implication in the better understanding of the transport of dense water masses in the North Atlantic.