The bismuth oxide (Bi2O3)-based method for removing chloride (Cl−) ions has garnered considerable interest because of its superior selectivity and efficiency in removing Cl−. However, the slow release of Bi3+ poses a challenge to the effectiveness of Bi2O3. In this study, a novel chloride removal agent composed mainly of Fe3+-doped Bi5O7NO3 (BF-x) was synthesized through the phase transformation of Bi2O3 by ferric nitrate. By optimizing the Fe/Bi mass ratio to 3 %: 1 (BF-3), a remarkable Cl− removal efficiency of 86.4 % was achieved, representing a substantial improvement compared to the 31.2 % removal efficiency observed for pure Bi2O3. The investigation of the mechanism and formation energy calculation revealed the inherent instability of Bi5O7NO3 in comparison to that of Bi2O3, which facilitated the release of Bi3+ and enabled the direct formation of BiOCl precipitate through ion exchange of NO3– with Cl−. The synergistic effect of chemical precipitation and ion exchange contributes to the excellent Cl− removal performance of BF-3. The final Cl− removal product, comprised of BiOCl and FeOOH, exhibited significant photocatalytic efficacy in the decomposition of organic contaminants. This study proposes a novel strategy for designing and preparing high-efficiency Cl− removal agents.