Add the softened butter to the bowl of a stand mixer fitted with the paddle attachment. Beat the butter on medium speed until it is smooth and creamy, about 30 seconds. Add the milk and vanilla and mix to combine.
With the mixer on low, slowly add the flour and powdered sugar. Continue mixing just until a shaggy dough forms.
Next, add the sprinkles and fold them gently into the cookie dough. Shape the dough into a disc and wrap it in plastic wrap. Place the dough in the fridge to chill for 30 minutes.
While the dough chills, preheat your oven to 350°F.
Lightly flour your work surface and roll the cookie dough out to ¼-inch thickness. Cut the dough out using your choice of cutter (I used a 2” round cutter) and place the dough on a parchment or Silpat lined baking sheet. These cookies don’t spread much so you only need to place them about 1 inch apart.
Bake for 14-16 minutes or until the cookies are just starting to turn golden brown on the bottom.
Allow the cookies to cool completely and then store them in an airtight container at room temperature for up to five days.