This paper presents a new scientific contribution on the two-dimensional (2-D) subdomain technique in polar coordinates taking into account the finite relative permeability of the ferromagnetic material. The constant relative permeability corresponds to linear part of the nonlinear B(H) curve. As in conventional technique, the method of separation of variables and the Fourier’s series are used for the resolution of magnetostatic Maxwell’s equations in each region. Although, the general solutions of magnetic field in the subdomains and boundary conditions (BCs) between regions are different in the conventional and proposed method. In this later, the magnetic field solution in each subdomain is a superposition of two magnetic quantities in the two directions (i.e., r- and Q-axis) and the BCs between two regions are also in both directions. For example, the scientific contribution has been applied to an air- or iron-cored coil supplied by a constant current. The distribution of local quantities (i.e., the magnetic vector potential and flux density) has been validated by a corresponding 2-D finite-element analysis (FEA). The obtained semi-analytical results are in very good agreement with those of numerical method.