The present invention provides a convenient and cost-effective process for preparation of Treosulfan. The process comprises reduction of dimethyl 2,3-O-isopropylidene-L-tartrate with sodium-bis(2-methoxyethoxy)aluminum hydride to give the alcohol 2,3-O-isopropylidene-L-threitol (III), which on reaction with methanesulfonyl chloride led to 2,3-O-isopropylidene-L-threitol 1,4-bismethanesulfonate of formula (IV) and further treatment of compound (IV) with formic acid gave Treosulfan (I) having desired purity.