Background: Achieving and maintaining haemostasis is of paramount importance in neurosurgery. Chitosan has been shown in both animal and human models to be significantly effective in haemostasis as well as in reducing adhesion formation. Objectives: To evaluate the haemostatic potential and to study histopathological changes caused by novel chitosan dextran gel in a neurosurgical sheep model. Method: Ten sheep underwent neurosurgical burr hole procedure. Bleeding control was tested at the level of bone, dura and brain separately with both chitosan gel and Gelfoam paste on separate burr holes. Baseline bleeding was measured at the time of injury using the Boezaart scale, and then every 2 min after the application of each agent until complete haemostasis or 10 min, whichever was earlier. Safety was assessed through MRI scans and histopathological analysis. Results: Mixed modeling showed no statistical difference in time to haemostasis between chitosan gel and Gelfoam paste (means of log-normalized areas under the curve were 1.3688 and 1.3196 respectively) for each burr hole (p = 0.7768). Logistic regression modeling showed that Chitosan significantly decreased the incidence of bleeding beyond the first time point measured after application of the treatment when compared to Gelfoam (OR = 2.7, p = 0.04). Average edema volume (cm3) on post-operative MRI was 0.97 for Gelfoam and 1.11 for (p = 0.49) while average histology scores were 2.5 for Gelfoam versus 3.3 for chitosan (p = 0.32). Conclusion: Chitosan dextran gel is an effective haemostatic agent to control bleeding in brain tissue. It is safe and nontoxic to neural tissue.