We show a simple room temperature surface functionalization approach using iodine vapour to control a surface phase transition from cubic silver (Ag) of thin films into wurtzite silver-iodid (β-AgI) films. A combination of surface characterization techniques (optical, electronical and structural characterization) reveal distinct physical properties of the new surface phase. We discuss the AgI thin film formation dynamics and related transformation of physical properties by determining the work-function, dielectric constant and pyroelectric behavior together with morphological and structural thin film properties such as layer thickness, grain structure and texture formation. Notable results are: (i) a remarkable increase of the work- function (by 0.9 eV) of the Ag thin layer after short a iodine exposure time (≤60 s), with simultaneous increase of the thin film transparency (by two orders of magnitude), (ii) pinning of the Fermi level at the valance band maximum upon iodine functionalization, (iii) 84% of all crystallites grain were aligned as a result of the evolution of an internal electric field. Realizing a nano-scale layer stack composed of a dielectric AgI layer on top of a metallic thin Ag layer with such a simple method has some technological implications e.g. to realize optical elements such as planar optical waveguides.