Add water, ginger, star anise, cinnamon stick, and vanilla in a large pot. Bring to a boil and reduce to a simmer; cook for 40 minutes. Add honey, tea and milk. Bring back to a boil then remove from heat. Allow to cool to room temperature, strain with a fine strainer or through a strainer and a paper towel or cheesecloth. Refrigerate until chilled.

In a 9 x 13 inch pan (or a pan large enough to fit in your freezer shelf) freeze mixture. When almost frozen, scrape with a fork to break up chai mixture. Re-freeze for another 1 1/2 to 2 hours, scrape again with a fork and return to freezer. When frozen, serve or transfer to a plastic container for later. If using later, allow to melt slightly then scrape again with fork and serve. Garnish with whipped cream and ground cinnamon, if desired.