This paper presents a novel variance (contrast) maximizing and brightness preserving color to grayscale image transformation method. We formulate the problem of converting color to grayscale image as a constrained optimization problem where we maximize the variance (contrast) of the grayscale image subject to the constraint that it preserves the brightness of the color image. Our algorithm has no free parameter and has a closed-form solution. We present experimental results to demonstrate the effectiveness of the new technique and compare it with other recent methods.