A new implementation of a Mach-Zehnder interferometer is presented. Aimed at facilitating coherent optical wavelength conversion, the interferometer utilizes a novel double displacement technique that eliminates dispersion induced phase discrepancies between its input and output arms. To demonstrate the design, the interferometer was incorporated into a source of polarization entangled photon pairs. The source produced on average 2-3 million photon pairs per second per mW of pump power, the pairs emitted being maximally entangled in the polarization degree of freedom with a fidelity of ≥98%_. The new interferometer implementation is simple and robust and promises to become a design benchmark for polarization entangled photon sources.