The band structure calculations in the GGA+U approximation show the presence of additional lattice distortions in the magnetically ordered phase of AgCrS2. The magnetostriction leads to the formation of long and short Cr-Cr bonds in the case when the respective Cr ions have the same or opposite spin projections. These changes in the Cr lattice are accompanied by distortions of the CrS6 octahedra, which in turn lead to the development of spontaneous electric polarization.