The results of optical spectroscopy and photometry of V404Cyg, the optical counterpart of the recently discovered X-ray transient GS2023 + 338, are presented. Optical spectra were obtained at the Roque de los Muchachos Observatory with the 2.5-mm Isaac Newton Telescope. The overall optical light curve was found to be similar to that of an earlier outburst of this star, which was recorded as Nova Cyg 1938 and classified as a classical nova. However, it is not a classical or recurrent nova, as the large range in optical brightness and intense and variable X-ray emission at maximum indicate that the system must be a low-mass X-ray binary. The reddened spectrum and interstellar absorption features indicate a probable distance in the range of 1-3 kpc. CCD photometry reveals that the source is variable, but gives no indication of the orbital period. Multicomponent fitting to the complex He II 4686-A line and subsequent analysis of various asymmetry parameters do not show any clear trend or periodicity.