An electrostatic finite‐sized particle simulation model is used to study the early time‐scale phenomena associated with an impulsively injected plasma, expanding radially, normal to a strong ambient magnetic field. Results of the simulation show the early formation of a radial polarization electric field due to ion–electron charge separation which causes electrons to drift in the azimuthal direction. Velocity shear within this motion gives rise to a Kelvin–Helmholtz (diocotron) instability, creating a radial fluted pattern as the plasma expands. In the nonlinear stage of instability, azimuthal variations in the electric field are observed which cause electrons to drift across the magnetic field, thereby reducing the space charge created by energetic ion expansion. The results of a linear stability analysis reveal that for a decreasing amount of charge separation in the plasma, the number of unstable azimuthal modes at maximum growth rate increases. Also, as the thickness of the electron ring increases, a fewer number of unstable modes develops for a given amount of charge separation. It is concluded that electrons become unstable at the very early time scale, within an ion gyroperiod, and that unstable electrons lead to modification of the ion dynamics.