The present invention relates to a cost effective and industrially advantageous process for the preparation of (3R,4S)-1-(4-fluorophenyl)-3-[3(S)-3-(4-fluorophenyl)-3-hydroxypropyl)]-4-(4-hydroxyphenyl)-2-azetidinone, referred to here as Ezetimibe and represented by structural formula (I). The process comprises an multi-step reaction sequence that includes a chiral auxiliary-controlled condensation, a silyl-mediated cyclization, a palladium-catalyzed Negishi cross-coupling, and the enantioselective reduction of a ketone to a hydroxyl group.