A method for the preparation of water-soluble chitosan with high purity and biological activity includes steps of: reacting chitosan oligo sugar acid salt, covalently bonded to an organic or inorganic acid, with trialkylamine in phosphate buffered saline followed by addition of an organic solvent to remove acid salt at C-2 position; adding the thus obtained reaction mixture to an inorganic acid to remove trialkylamine salt at C-6 position; and passing the thus obtained free amine chitosan through an activated carbon/ion exchange resin. The free amine chitosan is water-soluble and has a high bioavailability for application to the medicine and food industries.