Line a 9-inch square baking dish with parchment paper and set it aside. I use binder clips to keep the parchment paper in place.
In a large pot, melt butter over medium heat. Once melted, reduce heat to low and add all but 1 cup of the mini marshmallows to the pot.
Stir until marshmallows are completely melted. Remove from heat. Add vanilla extract and 1 cup of the Nutella. Stir until smooth. Add cereal and remaining 1 cup of the mini marshmallows. Stir until cereal is completely covered in marshmallow mixture, then pour it into prepared pan.
Melt remaining 0.25 cup of Nutella in microwave for 30 seconds. Drizzle over krispie treats. Allow treats to set about one hour. Cut and enjoy.
Notes
These treats store well in an airtight container at room temperature for up to 3 days.