Researchers at the Newcastle University have also found that the ancient Chinese brew may also play a vital role in guarding against cancer.
The team set out to discover whether the protective properties of the tea -previously shown to be present in the freshly brewed form -are still active once it has been digested.
"What was really exciting was that we found when green tea is digested, the resulting chemicals are actually more effective against key triggers of Alzheimer`s," study author Dr Ed Okello was quoted as saying by the Daily Mail.
"The digested compounds also had anti-cancer properties, significantly slowing down the growth of tumour cells which we were using in our experiments," Dr Okello said.
Two compounds are known to play a significant role in the development of Alzheimer`s - hydrogen peroxide and a protein known as beta-amyloid.
Previous studies have shown that polyphenols, present in black and green tea, bind with the toxic compounds and protect brain cells.
When ingested, the polyphenols are broken down to produce a mix of compounds and it was these the team tested in their research.
Dr Okello added: "Green tea has been used in traditional Chinese medicine for centuries and what we have here provides the scientific evidence why it may be effective against some of the key diseases we face today.
"There are obviously many factors which together have an influence on diseases such as cancer and dementia - a good diet, plenty of exercise and a healthy lifestyle are all important.
"But I think it`s fair to say that at least one cup of green tea a day may be good for you and I would certainly recommend it."
Rebecca Wood, chief executive of the charity Alzheimer`s Research Trust, said: "Diet and lifestyle almost certainly play a part in every person`s Alzheimer`s risk."
The new research has been published in the academic journal Phytomedicine.