Oreochromis fishes exhibit variability of sex-determination (SD) genes whose characterization contributes to understanding of the sex differentiation network, and to effective tilapia farming, which requires all-male culture. However, O. niloticus (On) amh is the only master-key regulator (MKR) of SD that has been mapped (XY/XX SD-system on LG23). In O. aureus (Oa), LG3 controls a WZ/ZZ SD-system that has recently been delimited to 9.2 Mbp, with an embedded interval rich with female-specific variation, harboring two paics genes and banf2. Developing genetic markers within this interval and using a hybrid Oa stock that demonstrates no recombination repression in LG3, we mapped the critical SD region to 235 Kbp on the orthologous On physical map (p < 1.5 × 10−26). DNA-seq assembly and peak-proportion analysis of variation based on Sanger chromatograms allowed the characterization of copy-number variation (CNV) of banf2. Oa males had three exons capable of encoding 90-amino-acid polypeptides, yet in Oa females, we found an extra copy with an 89-amino-acid polypeptide and three non-conservative amino acid substitutions, designated as banf2w. CNV analysis suggested the existence of two to five copies of banf2 in diploidic Cichlidae. Disrupting the Hardy–Weinberg equilibrium (p < 4.2 × 10−3), banf2w was concordant with female determination in Oa and in three cichlids with LG3 WZ/ZZ SD-systems (O. tanganicae, O. hornorum and Pelmatolapia mariae). Furthermore, exclusive RNA-seq expression in Oa females strengthened the candidacy of banf2w as the long-sought LG3 SD MKR. As banf genes mediate nuclear assembly, chromatin organization, gene expression and gonad development, banf2w may play a fundamental role inducing female nucleus formation that is essential for WZ/ZZ SD.