Building an agricultural subsidy policy system and an incentive and restraint mechanism that are oriented towards green ecology and promote the rational use of agricultural resources is one of the main directions of the reform of China’s agricultural subsidy system. This paper analyzed the difference of environmental impact between agricultural subsidy and agricultural green subsidy and examined the reform effect and existing problems of the current agricultural green subsidy policy in China. Results show that, theoretically, the technical effect of agricultural subsidies is conducive to improving the ecological environment, and the scale effect, structural effect and the technical effect of agricultural subsidies aggravate agricultural environmental pollution, but the direct and indirect effects of agricultural green subsidies are conducive to the improvement of the ecological environment. In practice, as the reform of China’s agricultural green subsidy system continues, specific goals, including ensuring the supply security of major agricultural products such as grain, stabilizing the increase of farmers’ income, and enhancing agricultural ecological environment protection, have been basically achieved or initial results have been achieved. However, there are still some existing problems, including low performance of agricultural green subsidies, insufficient overall planning of agricultural green subsidy policies, and difficult implementation of agricultural green subsidies. Therefore, to promote the green and low-carbon transformation of agricultural production in China, this paper suggests: deepening the reform of the agricultural green subsidy system to enhance the incentive effect of subsidies, formulating a comprehensive agricultural green subsidy policy mechanism and letting it to play a leading role in subsidy demonstration, and perfecting the subsidy application verification and checking mechanism while consolidating the grassroot agricultural economics professional team.