The phase diagram of water is complex, and interfacial effects can stabilize unusual structures at the nanoscale. Here, we employ bond order accelerated molecular dynamics simulations to show that upon encapsulation within bilayer graphene, water can spontaneously adopt a two-dimensional (monomolecular) layer of “square ice” at ambient conditions, instead of an encapsulated water droplet. Free energy calculations show that this motif is thermodynamically stable up to diameters of approximately 15 nm due to enhanced hydrogen bonding and favorable binding to the graphene sheets. Entropic losses due to solidification and reduced graphene-graphene binding enthalpy are opposing thermodynamic forces that conspire to limit the maximum size, but modification of any of these thermodynamic factors should change the range of stability. Simulated core-level spectroscopy reveals unambiguous orientation dependent signatures of square ice that should be discernable in experiments.