Pour cereal into a large bowl, set aside.
In a 1-quart saucepan, heat chocolate chips, peanut butter, nutella and butter over low heat, stirring frequently. Stir until completely combined and melted. Remove from heat; stir in vanilla extract. Pour mixture slowly over cereal while stirring with a spatula to evenly coat.
Pour cereal mixture into a large paper bag. Add powdered sugar slowly, close bag. Shake bag until well coated. Spread on waxed paper to cool.
Store in an air tight container.