Preheat the oven to 350°F (175°C). Lightly grease a 9x13-inch baking dish with cooking spray or oil.
In a large skillet over medium heat, cook the breakfast sausage until browned and fully cooked, breaking it into crumbles as it cooks. Drain excess grease if necessary.
Add diced bell pepper and onion to the skillet. Sauté for 3-4 minutes until the vegetables are softened.
In a mixing bowl, whisk together the eggs, milk, garlic powder, salt, black pepper, and paprika (if using) until well combined.
In the greased baking dish, layer the diced bread evenly across the bottom. Sprinkle half the shredded cheese on top of the bread.
Add the cooked sausage and vegetable mixture over the bread and cheese layer, spreading it evenly.
Pour the egg mixture over the sausage and bread layers, ensuring it soaks through.
Top with the remaining shredded cheese.
Bake in the preheated oven for 25-30 minutes or until the casserole is set and the top is golden brown.
Remove from the oven and allow to cool for a few minutes before slicing and serving.