Accurate separation of microparticles by shape has diverse applications in biology and biotechnology, but is a significant challenge in separation science and engineering. We demonstrate a simple and effective mechanism that can achieve shape-based separation of magnetic particles in microscale flows. In this method, a uniform magnetic field is applied perpendicularly to the flow direction, and causes shape-dependent lateral migration of the particles. Using high-speed imaging, we studied the rotational dynamics of the ellipsoidal particles. It is found that the lateral migration is correlated with the asymmetric rotation of the particles. Different from existing techniques that use magnetic forces, our method uses shape-dependent magnetic torque but zero magnetic force.