The spin -1/2 Ising-Heisenberg model on a diamond -decorated square lattice is exactly solved by the decoration -iteration transformation, which establishes an exact mapping correspondence with the spin -1/2 Ising model on a square lattice with an effective temperature -dependent interaction between the nearest -neighbor spins. Exact results for the pair correlation function and spontaneous magnetization of the Heisenberg spins gained from the exact mapping equivalence allow a straightforward implementation of the concurrence, which may serve as a measure of the bipartite entanglement within decorating Heisenberg spin pairs. It is evidenced that the concurrence gradually diminishes upon increase of temperature above a disordered monomer-dimer ground state until it completely vanishes at a threshold temperature, while the concurrence is either always zero above a spontaneously ordered ferrimagnetic ground state or it shows a peculiar thermally assisted reentrance accompanied with a mutual coexistence of the spontaneous ferrimagnetic long-range order and the thermal entanglement.