In small saucepan, combine the sugar with the water.
Using a small sharp knife split the vanilla bean from top to bottom, without going through the other side, and then cut it in half. Open the slit in each vanilla half and scrape the seeds into the water/sugar mix. Drop in the scraped vanilla pieces as well.
Set the saucepan over medium heat. Stirring occasionally, heat for 2 to 3 minutes or until sugar is completely dissolved. Remove it from the heat once it does. Let it cool and pour it along with the vanilla bean pieces into a small glass jar. Close the lid. Refrigerate up to 6 months.