The large area deposition and synthesis of 10 mm × 10 mm atomically thin Yb3+‐doped MoS2 films by femtosecond pulsed laser deposition on a silica glass optical platform for device applications are demonstrated for the first time. The presence of Yb3+‐ion doping is confirmed using photoluminescence (PL), X‐ray photoelectron spectroscopy (XPS), and Raman spectroscopy. The Yb3+‐doped MoS2 films, when excited with a 976 nm laser, exhibit room temperature PL with a peak at 1002 nm. The XPS and Raman spectroscopic analyses of the Yb3+‐doped and undoped films show that the deposited films are a mixture of 2H‐ and 1T‐MoS2 after postdeposition annealing at 500 °C. The density functional theory analysis shows that the 1T phase is metastable by +77 kJ (≈0.8 eV) mol‐1, when compared with the 2H state at 0 K. Ultrafast transient nonlinear optical spectroscopic measurements prove that the saturable absorption of undoped MoS2 is significantly modified after Yb3+‐ion doping, by displaying dopant‐host structure charge transfer. The complex transient absorption line shape shows a combination of bleach (negative) signals at the A (670 nm) and B (630 nm) exciton energies, and a strong induced absorption below the A exciton level. The results presented herein provide critical insight in designing novel rare‐earth‐ion doped 2D materials and devices.