We report the crystal structure and magnetic properties of a novel β polymorph of K2AgF4. β‐K2AgF4 is paramagnetic above 20 K and exhibits a low Curie temperature (θ < 5 K). Solid state DFT (GGA and GGA+U) calculations were performed to analyze the electronic and magnetic structure of β‐K2AgF4 at 0 K/0 GPa, reproducing correctly the ferromagnetic (FM) semiconductor ground state with the band gap at the Fermi level of approximately 1.65 eV. Furthermore, we show that the novel β form is thermodynamically favoured over the previously reported two‐dimensional α form and can be formed either by slow spontaneous exothermic α to β phase transition occurring on heating or direct synthesis from KF and AgF2 at 300 °C. The relative stability of the α and β phases is rationalized in terms of the size of the M+ cation in the M2M′F4 series (M = Na, K, Cs, M′ = Cu, Ag) and the mismatch between [MF] and [M′F4/2] sublattices in the layered perovskite α form.