Background: Vinegar, an acidic functional fermentation product and known for its diverse health benefits was developed using liquid jaggery. A study was conducted to standardize the method of vinegar production from liquid jaggery using two different sugarcane varieties viz., CoH160 and Co89003. Methods: The submerged fermentation of liquid jaggery was carried out using yeast Saccharomyces cerevisiae and vinegar was produced using Acetobacter aceti. For the computation analysis of an optimized solution, a central composite rotatable design was applied which constituted three variables temperature (°C), inoculum concentration (%) and incubation time (days) and its influence on acetic acid percent as an important response was studied using Response Surface Methodology. Overall, twenty experimental trials were conducted as well as assessed on the vinegar quality indexes. Result: Vinegar prepared with 7.5 per cent inoculum concentration, incubated for a fermentation period of 12.5 days at 28.5°C was selected due to maximum acetic acid concentration achieved ( greater than 3.5% (w/v). The optimized vinegar contained total soluble solids (4.55-4.75 °Brix), reducing sugar (0.26-0.29%), total sugars (2.7-2.8%), titratable acidity (4.72-5.10%), pH (4.28-4.52), ascorbic acid (17.64-19.97%), alcohol content (0.68-0.79%), acetic acid (3.52-3.83%) and total phenols (36.69-38.22 mg/100 ml). The liquid jaggery vinegar had a bright yellow- brown color, cane flavor and vinegar aroma. It was found organoleptically acceptable.