Using high resolution X-Ray diffraction (XRD) on high purity powders, we resolved the structure and ab symmetry of the intriguing compound Sr2VO4 from room temperature down to 20 K to an unprecedented level of accuracy. Upon cooling, this new set of data unambiguously reveals a second order phase transition lowering the symmetry from tetragonal to orthorhombic at a temperature Tc2 = 136 K. The observation of an orthorhombic distortion of the ab-plane is attributed to nematic phase formation supported by local Jahn-Teller (JT) dynamical instability. At TN = 105 K, spins order and at Tc1 = 100 K the tetragonal structure is recovered with an elongated c-axis.