Two-dimensional (2D) nanostructures show interesting properties compared to other low-dimensional nanostructures due to their pronounced anisotropic features governing the physicochemical properties of materials. In this context, multiferroic bismuth ferrite (BiFeO₃/BFO) nanostructures are developed via a facile hydrothermal process by varying the surfactants leading to 3D nanoparticulate and 2D nanoflaky structures with dimensions in the range of 50–100 nm. The developed materials are characterized for their structural, morphological, optical and surface properties using XRD, Rietveld refinements, XPS, FTIR, UV–Vis, PL and BET techniques. The optimization studies by varying the concentration of dye (5, 10, 15, 20 ppm) and photocatalyst (25, 50, 75 and 100 mg) suggest that 10 ppm of dye and 50 mg of photocatalyst concentration is optimal, which showed around 98% and 96% degradation of chromogenic methyl orange and crystal violet dye molecules, respectively within 120 min. The insights from UV–Vis, PL, Mott-Schottky analysis, photocurrent and electrochemical impedance suggested that the opto-electronic properties of BFO are meaningly improved due to its 2D-flaky anisotropic features compared to 3D isotropic particulate structure. The radical detection experiment revealed that the dye degradation is mediated by advanced oxidation process via high energetic hydroxyl radicals driven by the improved ferroelectricity-mediated band-bending and internal electrical fields in BFO flakes compared to particles. Magnetic studies by VSM showed that the BFO flakes manifest enhanced ferromagnetic properties compared to particles contribute to both catalytic activity as well as its easy catalyst-recovery with minimal loss. The recycle experiments confirmed that the BFO-flakes are photochemically stable for prolonged use for industrial application.