The role of Bi layer (thickness ∼7nm) on As2S3 film was extensively studied for different optical applications in which Bi (top layer) as active and diffusing layer and As2S3 as barrier (matrix) layer. Bilayer thin films of Bi/As2S3 were prepared from Bi and As2S3 by thermal evaporation technique under high vacuum. The decrease of optical band gap with the addition of Bi to As2S3 has been explained on the basis of density of states and the increase in disorder in the system. It was found that the efficient changes of optical parameters (transmission, optical band gap, refraction) could be realized due to the photo induced diffusion activated by the focused 532nm laser irradiation and formation of different bonds. The diffusion of Bi into As2S3 matrix increases the optical band gap producing photo bleaching effect. The changes were characterised by different experimental techniques.