In his incredibly useful book Super Structure, author and writing coach James Scott Bell uses a 14-point system as an outline of the necessary points every story needs and – this is most important – why they’re needed and why they don’t stifle creativity but release it.
Using his format, early in Act III, there’s a moment called “Lights Out,” that moment where it’s always darkest before dawn, where something happens that makes the MC think she cannot possible overcome the forces against her, a moment of sacrifice (in this case, of a friend) that spurs on the final battle. There are other points in the story where a significant death can be the “signpost,” as Bell calls them, but “Lights Out” seems to be where you are with your character.
Something significant has to be sacrificed in order for the MC to achieve the transformation that this journey, your story, is all about. It sounds like you are right on about the need to sacrifice this character at the end of this long arc, so by all means, trust your instincts!
Just make sure the death is important and relevant. YA author Kris Noel has some general tips here.
As I’ve said before, I loathe recommending followers buy anything, but you can get JSB’s book for $2.99 and the Kindle app is free and I guarantee if you have plot issues or problems, this book will help.