Brazil has experienced some of the highest numbers of COVID-19 infections and deaths globally and made Latin America a pandemic epicenter from May 2021. Although SARS-CoV-2 established sustained transmission in Brazil early in the pandemic, important gaps remain in our understanding of local virus transmission dynamics. Here, we describe the genomic epidemiology of SARS-CoV-2 using near-full genomes sampled from 27 Brazilian states and an adjacent country - Paraguay. We show that the early stage of the pandemic in Brazil was characterised by the co-circulation of multiple viral lineages, linked to multiple importations predominantly from Europe, and subsequently characterized by large local transmission clusters. As the epidemic progressed, the absence of effective restriction measures led to the local emergence and international spread of Variants of Concern (VOC) and under monitoring (VUM), including the Gamma (P.1) and Zeta (P.2) variants. In addition, we provide a preliminary genomic overview of the epidemic in Paraguay, showing evidence of importation from Brazil. These data reinforce the need for the implementation of widespread genomic surveillance in South America as a toolkit for pandemic monitoring and providing a means to follow the real-time spread of emerging SARS-CoV-2 variants with possible implications for public health and immunization strategies.