A bypass mechanism is disclosed for use with a turbocharger. The bypass mechanism may have an exhaust passage formed by at least a first wall, and a bypass manifold formed by at least a second wall surrounding the exhaust passage and including a space between the first wall and the second wall. The bypass mechanism may further have at least one opening in the first wall fluidly connecting the exhaust passage with the space. At least one valve is configured to open and close the opening to selectively allow exhaust gas to pass from the exhaust passage to the space through the at least one opening. The space may be fluidly connected to at least one entry passage of an exhaust stack. In addition, the at least one opening and the at least one entry passage may be positioned on opposite sides of the exhaust passage.