Currently, one of the most important problems of environmental protection is the deep and complex processing of mineral raw materials. This problem is especially relevant when processing substandard ores and production waste, one of which is phosphogypsum. This study examines the process of CaSO4/CaS composite material formation during the reduction of phosphogypsum with citric acid. The composite structure formation mechanism is proposed. The resulting materials are characterized using various methods, including X-ray diffraction (XRD), transmission electron microscopy, the Scherrer method, thermogravimetric analysis (TGA), and FT-IR spectroscopy. The reduced sample emits orange radiation in the range of 500–750 nm with a quantum yield of 0.17. Experimental results showed that the sample decomposition process in the solid state consisted of two components with a predominant contribution from the long-lived component (~46 ns). The optimal conditions for producing luminescent materials by reducing phosphogypsum with citric acid were determined: a heat treatment temperature of 1073 K, a holding time of 60 min, and a reducing agent mole fraction of 37%. It was found that an increase in temperature with a simultaneous decrease in heat treatment time, as well as a decrease in temperature with a simultaneous increase in heat treatment time, led to a decrease in the luminescent properties of the synthesized material compared to optimal values. The results can be used to develop technology for recycling large-tonnage waste from the chemical industry into luminescent materials.