The present invention provides a method of obtaining Psidium guajava leaf extract standardized to phytochemicals. The extract obtained is highly soluble in water, and contains standardized phytochemicals such as, guijavarin specifically saponins and polyphenols, which may be used in food and beverage products. The method involves the specific method of filtration to obtain highly purified form of phytochemical. The extract obtained is subjected to bio-activity guided fractionation to isolate different compounds to obtain phytochemical enriched fraction followed by purification and isolation of the single phytochemical from the enriched bioactive fraction. The phytochemical is identified as guijaverin, which also exhibits anti-diabetic activity. The Psidium guajava leaf extract is useful in food and beverage industries and is used in different formulations such as chocolates, capsules, and aqua based supplement drinks.