In this study, for the augmented linear system of discrete ill-posed problems we establish a new two-step (NTS) iteration method containing a parameter and a parameter matrix, which is based on the Hermitian and skew-Hermitian splitting (HSS) and the upper and lower triangular splitting (ULT) of the coefficient matrix. Then, we theoretically study its convergence properties and determine its optimal iteration parameters. It is seen that the NTS method converges faster when the parameters are chosen properly. Experimental examples are carried out to further validate the effectiveness and accuracy of the new method compared to the newly developed methods in terms of the numerical performance and image recovering quality.