We report on the measurement of the direct emission (DE) and interference (INT) terms of the K ± → π ± π 0 γ decay by the NA48/2 experiment at the CERN SPS. From the data collected during 2003 and 2004 about 600k such decay candidates have been selected. The relative amounts of DE and INT with respect to the internal bremsstrahlung (IB) contribution have been measured in the range 0 < T * π < 80 MeV:where T * π is the kinetic energy of the charged pion in the kaon rest frame. This is the first observation of an interference term in K ± → π ± π 0 γ decays, thus allowing the normalised electric and magnetic amplitudes to be measured, giving X E = (−24 ± 6) GeV −4 , and X M = (254 ± 9) GeV −4 .In addition, a limit on the CP violating asymmetry in the K + and K − branching ratios for this channel has been determined to be less than 1.5 × 10 −3 at 90% confidence level.