The aim of this study was to develop a novel controlled ionic gelation strategy for chitosan nanoparticle preparation to avoid particle aggregation tendency associated with conventional ionic gelation process. In this study inclusion complexation behaviour of sodium tripolyphosphate (TPP) with beta cyclodextrin (β-CD) has been investigated. The TPP-β-CD inclusion complex was characterized by FT-IR, XRD and DSC techniques. The complexation behaviour was also investigated by molecular docking study. The results showed that the TPP molecule formed inclusion complex with β-CD. Further, TPP-β-CD inclusion complex was used to prepare chitosan nanoparticles. The chitosan nanoparticles based on TPP-β-CD inclusion complex had smaller size of 104.2nm±0.608, good PDI value of 0.346±0.016 and acceptable zeta potential of +27.33mV±0.416. The surface characteristics of chitosan nanoparticles were also observed with transmission electron microscopy. Results indicates that TPP-β-CD inclusion complex can be used for the formation of chitosan nanoparticles with smaller and more uniform particle size in comparison to conventional TPP based chitosan nanoparticles.