We observed linear magnetoelectric effect for the fist time in one of the well known green phases Sm2BaCuO5 which was seen as a secondary phase in the early synthesis of SmBa2Cu3O7 superconductor. Based on symmetry consideration of its isostructural compounds, we suggest k=0 magnetic structure. However, it is important to verify this hypothesis by performing neutron diffraction measurements and determine the magnetic structure of this compound. This compound exhibits two magnetic transitions, one at TN1=23 K and another at 5 K. Theses transitions are associated with antiferromagnetic ordering of Cu^{2+} and Sm^{3+} ions, respectively. The linear magnetoelectric effect occurs at TN1 with large magnetoelectric coefficient 44 ps/m. Therefore, the magnetic structure is very important to understand the origin of ME effect and also to understand the 4f-3d interactions.