Preheat the oven to 325 degrees.

Cream the butter and sugar together in a bowl. Add vanilla and water. Mix in the flour until blended.

Cover and chill for 3 hours.

Shape dough into balls. Place on an unprepared cookie sheet and bake for 15 to 20 minutes.

When cookies have cooled, roll them in powdered sugar.

Store at room temperature in an airtight container.