In order to write "Thus is the Way of God" in Latin I have penned,
SIC DEUS ITER
Is it grammatically correct?
Grammar-wise, your sentence is not quite correct. Since it is the way “of God,” deus should be in the genitive case, dei. Latin being Latin, you can theoretically put it wherever you want in your sentence, but I will note that if you put it at the end, that would have the effect of evoking a number of familiar Christian expressions like Mater dei or Gloria dei. Of course, whether that would be a good thing is for you to decide.
Also, your sentence is lacking a verb, which would be est. Now in a simple indicative sentence like this you can leave your form of esse out, but personally I would prefer to put it in (it is a matter of taste, however). So a grammatically correct form would be:
Sic est iter dei.
The English word “way” is ambiguous, and the Latin iter captures some of that ambiguity. Lewis & Short (aside from the literal meaning) give: “a way, course, custom, method of a person or thing.” Still, it seems to me that many of the examples they give retain a sense of a path that will lead to a certain goal (e.g., Cicero's verum iter gloriae likely is not the “true way of glory,” but rather the path to glory).
So I would like to suggest opting for via instead. It can also refer to a path or road (many of the famous Roman roads were via somethings), but also to a method or modus operandi, or what in modern English is sometimes called a “philosophy,” e.g. recta vivendi via = “the right way of living” or via ardua virtutis = “the hard, virtuous way.” (Of course, if you strictly mean God's modus operandi, you can also say modus operandi, it's perfectly good Latin, as you will have guessed.)
So that would leave us with:
Sic est via dei.
It happens to have a precedent in the Latin Bible. God's ways are famously past finding out, as the Apostle Paul writes in his letter to the Romans (Romans 11:33). The Vulgate gives this translation (of the original Greek, which Paul used, despite the fact that he wrote to the Romans):
quam [incomprehensibilia] sunt [judicia ejus, et] investigabiles viae ejus!
(You will no doubt have noticed that the Vulgata did not omit its form of esse here ;-)) If you wanted to follow this example in using the plural, you would end up with:
Sic sunt viae dei.
Consider using mos, moris for the English word "way". mos, moris has the following translations: (custom, habit; mood, manner, fashion; character (pl.) behavior, morals) The Latin word "via" is common in Christian Latin so you could use that for "way". Don't use "iter".