DNA damage tolerance (DDT) mechanisms facilitate replication resumption and completion when DNA replication is blocked by bulky DNA lesions. In budding yeast, template switching (TS) via the Rad18/Rad5 pathway is a favored DDT pathway that involves usage of the sister chromatid as a template to bypass DNA lesions in an error-free recombination-like process. Here, we establish that the Snf2 family translocase Irc5 is a novel factor that promotes TS and averts single-stranded DNA persistence during replication. We demonstrate that, during replication stress, Irc5 enables replication progression by assisting enrichment of cohesin complexes, recruited in an Scc2/Scc4-dependent fashion, near blocked replication forks. This allows efficient formation of sister chromatid junctions that are crucial for error-free DNA lesion bypass. Our results support the notion of a key role of cohesin in the completion of DNA synthesis under replication stress and reveal that the Rad18/Rad5-mediated DDT pathway is linked to cohesin enrichment at sites of perturbed replication via the Snf2 family translocase Irc5.