The topochemical transformation of single crystals of Sr$_3$Ir$_2$O$_7$ into Sr$_3$Ir$_2$O$_7$F$_2$ is reported via fluorine insertion. Characterization of the newly formed Sr$_3$Ir$_2$O$_7$F$_2$ phase shows a nearly complete oxidation of Ir$^{4+}$ cations into Ir$^{5+}$ that in turn drives the system from an antiferromagnetic Mott insulator with a half-filled J$_{eff}=1/2$ band into a nonmagnetic $J=0$ band insulator. First principles calculations reveal a remarkably flat insertion energy that locally drives the fluorination process to completion. Band structure calculations support the formation of a band insulator whose charge gap relies on the strong spin-orbit coupling inherent to the Ir metal ions of this compound.
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