Size segregation in granular materials is a universal phenomenon popularly known as the Brazil nut effect (BNE), from the tendency of larger nuts to end on the top of a shaken container. In nature, fast granular flows bear many similarities with well-studied mixing processes. Instead, much slower phenomena, such as the accumulation of ferromanganese nodules (FN) on the seafloor, have been attributed to the BNE but remain essentially unexplained. Here we document, for the first time, the BNE on sub-millimetre particles in pelagic sediment and propose a size segregation model for the surface mixed layer of bioturbated sediments. Our model explains the size distribution of FN seeds, pointing to a uniform segregation mechanism over sizes ranging from < 1 mm to > 1 cm, which does not depend on selective ingestion by feeding organisms. In addition to explaining FN nucleation, our model has important implications for microfossil dating and the mechanism underlying sedimentary records of the Earth’s magnetic field.