Abstract We report a novel transparent electrode structure made of Ag–Ni bilayer on polyethylene terephtalate (PET) substrates. However, without any adequate countermeasure, such an ultrathin layer would uninvitedly oxidize even at ambient conditions due to permeation of moisture and oxygen through the polymer substrates. A combination of heat and Ar plasma pretreatment was found to significantly increase the stability of the metals layers deposited onto polymer substrates. The 1 nm Ni capping layer provides higher work function together with stability to the underlying Ag conducting layer over time and in harsh conditions of 85 °C and 85% relative humidity. The obtained Ag–Ni bilayer ultrathin films show average transparency of 75% in the visible region and sheet resistance of 11 Ω/sq. To demonstrate its operational potential, the electrode has been used as the transparent anode in an organic solar cell (OSC), which shows an overall photon conversion efficiency of >90% of the indium tin oxide (ITO) based cell which was measured to be 2.67%. With respect to ITO, the proposed transparent electrode has several advantages, including mechanical flexibility, room temperature processing and low cost.