The present invention relates to an improved, cost effective and easy process for the preparation of azithromycin monohydrate isopropanol clathrate. The process provides a one-step method of preparing azithromycin monohydrate isopropanol clathrate directly from 9-deoxo-9a-aza-9a-homoerythromycin A. The process comprises at least partial dissolution and/or suspension of 9-deoxo-9a-aza-9a homoerythromycin A in isopropanol to form a mixture, adding methylating solution to the said mixture, refluxing or heating said mixture to form a reaction mixture, adding alkaline solution to the reaction mixture to adjust pH from about 10 to about 11 and isolating pure azithromycin monohydrate isopropanol clathrate. The process helps in reducing the total time of preparation, total utility cost for the production and also helps to avoid handling loss.