In order to have a check and balance of the toxic gases in the environment, various kinds of sensors are currently being researched upon. As many of the toxic gases are also inflammable, therefore, there is a constant search for materials which can detect the gases at lower temperatures. Also, it is important that the sensor is selective for a particular gas. To meet such requirements, nanos-tructured materials are extensively being explored for such gas sensing applications, due to their large effective surface area. And, in order to further improve the gas sensing properties, metal catalysts are deposited over such nanomaterials. The smaller sized nanoparticles show better catalytic activity due to its effective larger surface area per unit volume. Depositing bimetallic materials is thus advantageous, since it can reduce the size of nanoparticles produced. In this work, ~7 nm thick Au/Pd thin film was sputter-coated over SnSe₂ nanostructured thin films. SnSe₂ thin film were deposited by thermally evaporating SnSe₂ powder. The materials were characterized for their structural, morphological and gas sensing properties. The ambient temperature response for 5 parts per million (ppm) NO₂ gas was measured to be 117%, with the response and recovery times being 10 and 19 seconds, respectively. The performance of the sensor improved with increase in the gas concentration and for 10 ppm gas, the recorded response was 137%, with the corresponding response and recovery times being 9 and 8 seconds, respectively. The limit of detection was 655 parts per billion (ppb). The mechanism of ambient temperature high response and low response/recovery times have been discussed based on physisorption, charge transfer, Au/Pd decoration and SnSe-SnSe₂ based p-n junction. In addition, an important aspect of this work worth pointing out is the deposition of a thin film consisting of nanostructured network using an industrially viable thermal evaporation method. Thus, this work opens a new dimension for 2D materials that can be used for selective gas detection at ambient temperature.