The synthesis, structure determination and calculated electronic structure of the new phase, Gd2AlGe2, are reported. The Compound crystallizes in a new structure type with space group C2/c, a = 10.126(2) Angstrom, b = 5.6837(12) Angstrom, c = 7.7683(16) Angstrom, and beta = 104.729(3)s. Tight-binding linear-muffin-tin orbital (TB-LMTO-ASA) calculations show a distinct minimum in the total density of states for this structure at 18 valence electrons per formula unit (Gd2AlGe2 has 17 valence electrons in its formula unit), which arises from polar covalent bonding within the three-dimensional [AlGe2] net, Gd-Ge interactions and three-center, two-electron bonding between Al and Gd. The structure is a new stacking variant of the W2CoB2 structure type, which is observed for numerous ternary rare-earth silicides and germanides.