Reducing bandgap energy in ferroelectric materials has become an important commitment to improve the performance of the photovoltaic solar cell. This study reports the effect of the transition metals Co and Fe ions co-doping on the structure and bandgap of neodymium-modified Bi4Ti3O12 based oxide. The quantitative structural analyses by XRD confirms well-crystallized samples with orthorhombic crystal structure based on B2cb space group. Optical properties were measured by a UV–vis spectrometer. The oxygen vacancies presence and the Fe and Co valence states estimation were carried out by electron spin resonance. The incorporation of Co and Fe ions into Bi3.25Nd0.75Ti3O12 significantly modified the bandgap structure, promoting a red-shift and lower energies absorption which was related to the changes in tilting angles, bond lengths, octahedral distortions and oxygen vacancies formation, still maintaining a ferroelectric spontaneous polarization. To our knowledge, it is a new approach to link quantitively the octahedra distortion to the bandgap decreasing for Aurivillius compounds providing a newly available method of manipulating the bandgap tuning on the ferroelectric oxide’s materials.