Prepare the hazelnuts. Place the roasted hazelnuts in a food processor or blender.

Pulse until roughly chopped, but not completely smooth.

Make the syrup. In a medium saucepan, combine the water and sugar over medium heat. Stir until the sugar dissolves.

Add the chopped hazelnuts to the saucepan. Bring to a simmer and cook for 10–15 minutes, allowing the hazelnuts to infuse the syrup.

Remove from heat and let cool to room temperature.

Strain through a fine mesh strainer or cheesecloth into a jar or bottle. Press gently with the back of a spoon to extract more syrup.

Stir in the vanilla extract. Let cool completely before storing.