Chop the rhubarb into small pieces. Place it in a large saucepan with the water. Bring to a boil, and simmer about 5-10 minutes.
Spoon the fruit and liquid into a jelly bag suspended over a medium bowl. Allow to drain for 8-10 hours or overnight.
Measure 3 c. of juice from the bowl, and discard the solids from the jelly bag.
In a large saucepan, bring the juice and sugar to a boil. when the mixture reaches a boil, add the butter. Skim off any foam. Proceed to a full rolling boil.
Stir in the pectin until fully dissolved. Remove from heat. Ladle hot jelly into prepared jars. It will keep a few weeks in the refrigerator. Or you may process your jars according to USDA recommendations for the size of the jars.
Yields 7-8 4 oz. jars