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Add the peaches, brown sugar, and water to a saucepan.
Bring to a gentle simmer over medium heat.
Reduce heat to medium-low and simmer for 8-101 minutes, stirring occasionally.
Lightly mash the peaches with the back of a spoon as they soften.
Remove from heat and let steep for 10–15 minutes.
Strain through a fine-mesh strainer, pressing gently on the peaches to extract more liquid.
Stir in the vanilla extract after straining.
Let cool completely before bottling.
Store in a sealed jar or bottle in the refrigerator. Best used within 2–3 weeks.