Combine water, sugar, and dried lavender buds in a small saucepan.

Heat over medium heat, stirring occasionally, until sugar dissolves and the mixture gently simmers (about 15 minutes).

Remove from heat and let the lavender steep for another 15 minutes for maximum flavor.

Strain the syrup through a fine mesh sieve into a clean bottle or jar to remove the lavender buds.

Stir in ½ teaspoon vanilla extract.

Let syrup cool to room temperature, then store in the fridge for up to 2 weeks.