Preheat the oven to 350°F (175°C) and line a baking sheet with parchment paper.

In a saucepan, combine brown sugar, butter, and water. Cook over medium heat until the mixture boils.

Stir continuously until the mixture reaches a golden brown color.

Remove from heat and stir in vanilla extract.

Add the walnuts to the toffee mixture and stir until well coated.

Spread the coated walnuts on the prepared baking sheet and bake for 10 minutes.

Remove from the oven and let cool before serving.