Grease a 9x13-inch baking dish with butter or non-stick spray.

In a large skillet over medium-high heat, cook the breakfast sausage, breaking it apart with a spoon, until browned and cooked through, about 5-7 minutes. Add the chopped yellow onion and cook for another 3-4 minutes until softened. Drain any excess grease from the skillet.

Spread half of the bread cubes in an even layer in the bottom of the prepared baking dish. Top with half of the sausage and onion mixture, then sprinkle with 1 cup of the shredded cheddar cheese.

Layer the remaining bread cubes on top, followed by the rest of the sausage mixture.

In a large mixing bowl, whisk together the eggs, whole milk, Dijon mustard, salt, black pepper, and smoked paprika until well combined and frothy.

Carefully and evenly pour the egg mixture over the layers in the baking dish. Gently press down on the bread with a spatula to ensure it is submerged and can soak up the custard. Sprinkle the remaining 1 cup of cheddar cheese over the top.

Cover the dish tightly with plastic wrap or foil and refrigerate for at least 8 hours, or up to 24 hours.

Preheat your oven to 375°F (190°C). Remove the casserole from the refrigerator and let it sit at room temperature for 20-30 minutes while the oven heats up. Remove the plastic wrap or foil.

Bake uncovered for 50-60 minutes, or until the center is set (a knife inserted in the middle comes out clean) and the top is golden brown and puffy. If the top starts to brown too quickly, you can loosely tent it with foil for the last 10-15 minutes of baking.

Let the casserole rest for 10 minutes before slicing. This allows it to set up properly for cleaner slices.

Garnish with fresh chives before serving, if desired.