Activate the yeast: In a small bowl, dissolve the yeast in warm milk with 1 tbsp sugar. Let it sit for 5–10 minutes until frothy.
Mix the dough: In a large bowl, combine the flour, remaining sugar, and salt. Add the yeast mixture, eggs, vanilla extract, and softened butter. Knead for 8–10 minutes until smooth and elastic.
First rise: Cover the dough with a clean kitchen towel and let it rise in a warm place for 1.5–2 hours until doubled in size.
In a bowl, mix the melted chocolate, hazelnut spread, cocoa powder, sugar, and crushed hazelnuts until smooth.
Roll out the dough into a large rectangle (about ½ cm thick).
Spread the filling evenly over the dough. Roll it tightly into a log and then cut it lengthwise into two strips. Twist the two strips together, keeping the cut sides facing up.
Second rise: Place the twisted dough into a greased loaf pan. Cover and let it rise for another 45–60 minutes.
Preheat the oven to 350°F (180°C). Bake for 35–40 minutes until golden brown.
While the Babka bakes, heat the water, sugar, and vanilla extract in a saucepan until the sugar dissolves. Let it cool slightly.
As soon as the Babka is out of the oven, brush it with the syrup to keep it moist and glossy. Let it cool slightly before slicing. Enjoy!
