The present report describes the set‐up and first operation results of a novel carousel magnetic separator. This carousel magnetic separator is suitable for continuous separation of magnetized particles from water. Continuous operation is achieved by a segmented rotating separation matrix. This matrix also allows the use of low‐cost permanent magnets, by means of which magnetic fields of up to 0.5 T can be generated without energy consumption. The suitability of a first prototype of this carousel magnetic separator was tested for elimination of magnetite‐containing iron phosphate and iron hydroxide flocs. These flocs result from conventional precipitation/flocculation of municipal sewage with FeCl3 and the addition of magnetite particles generated by wet‐chemical processes. First results demonstrate that the carousel magnetic separator can reduce phosphate concentrations of up to 14 mg/L PO43–‐P in the inlet to below 1 mg/L PO43–‐P in the outlet at filtration rates of about 40 m/h. Magnetite dosage in the range of 50 mg/L affects phosphate precipitation positively via a slight reduction of the precipitant volume. However, the total amount of chemicals required for phosphate elimination is increased by the substances needed for magnetite production. Therefore, a further reduction of magnetite dosage must be achieved.