Place one cup of water and sugar in a small saucepan. Bring to a boil, stirring to dissolve the sugar. Remove from heat.
Stir the tea bags and vanilla into the saucepan. (Alternatively, measure loose-leaf tea into a sachet and drop it into the water). Steep for 15 minutes. Squeeze out the tea bags into the mixture and discard.
Store the syrup in an airtight container in the refrigerator.
Make the Latte
Steam and froth the milk. Stir in 5 Tbsp. of chai tea syrup. Garnish with ground cinnamon, whipped cream and a cinnamon stick, if desired.