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Topochemical reduction of Sr(3)Co(2)O(5)Cl(2) with NaH at 200 °C yields Sr(3)Co(2)O(4)Cl(2), a phase consisting of infinite double sheets of corner-linked Co(II)O(4) square planes stacked with SrCl rocksalt layers. At 298 K, the structure of Sr(3)Co(2)O(4)Cl(2) is described in the tetragonal space group I4/mmm [a = 4.007(1) Å, c = 22.282(1) Å]; however, on cooling below 200 K, the structure undergoes a lattice distortion to adopt a structure with orthorhombic symmetry in space group Immm [a = 3.9757(5) Å, b = 4.0294(5) Å, and c = 22.147(3) Å at 5 K]. The structural distortion can be considered Jahn-Teller-like as it lifts the orbital degeneracy of the square planar, d(7), Co(II) centers, demonstrating a strong coupling between the electronic configuration and the structural lattice of this oxychloride phase. On cooling below 50 K, Sr(3)Co(2)O(4)Cl(2) adopts a canted antiferromagnetically ordered state. All magnetization data show that the local cobalt moment is much greater than would be expected for a simple spin-only S = 3/2 center, indicating a strong orbital contribution to the magnetic behavior.