Intense laser pulses can be used to demagnetize a magnetic material on an extremely short timescale. While this ultrafast demagnetization offers the potential for new magneto-optical devices, it poses challenges in capturing coupled spin-electron and spin-lattice dynamics. In this article, we study the photoinduced ultrafast demagnetization of a prototype monolayer ferromagnet Fe3GeTe2 and resolve the three-stage demagnetization process characterized by an ultrafast and substantial demagnetization on a timescale of 100 fs, followed by light-induced coherent A1g phonon dynamics which is strongly coupled to the spin dynamics in the next 200–800 fs. In the third stage, chiral lattice vibrations driven by nonlinear phonon couplings, both in-plane and out-of-plane are produced, resulting in significant spin precession. Nonadiabatic effects are found to introduce considerable phonon hardening and suppress the spin-lattice couplings during demagnetization. Our results advance our understanding of dynamic charge-spin-lattice couplings in the ultrafast demagnetization and evidence angular momentum transfer between the phonon and spin degrees of freedom.