Combine water, sugar, and ginger in a large saucepan. Bring to boiling; reduce heat. Simmer, covered, for 5 minutes. Remove from heat. Add tea bags; let stand, covered, for 3 minutes.
Remove tea bags. Strain ginger from tea; discard ginger.
Transfer tea to a 2-gallon pitcher or punch bowl. Cover and chill for 2 hours or overnight. Makes 12 servings.