Cut the vanilla bean lengthwise to expose the seeds, then chop into 1-inch pieces. Add to a medium saucepan and heat over medium-low, stirring constantly. Toast the vanilla bean pieces for 2-3 minutes, until fragrant.
Carefully add the water to the saucepan, then the sugar, and stir to combine. Bring the syrup to a simmer over medium heat, stirring occasionally. Allow the syrup to simmer for 10 minutes.
Remove from heat and allow to cool for 15 minutes at room temperature. Strain out the vanilla bean pieces and transfer the syrup to a mason jar or syrup bottle. Store in the fridge for up to 2 weeks!
Notes
This makes about 1.25 cups of toasted vanilla bean syrup!