Preheat your oven to 350°F. Grease a 9×13 baking dish with nonstick cooking spray to prevent any sticking.
Begin by cutting your Italian bread into 1-inch cubes. You’ll want these to be uniform so they bake evenly. Place half of the cubes into the prepared baking dish, spreading them out.
In a medium bowl, beat together cream cheese, powdered sugar, and 1/4 cup milk until smooth. This mixture should be creamy and spreadable. Spoon dollops over the bread cubes, or you can spread it gently if you prefer.
Next, sprinkle the chopped strawberries over the cream cheese layer. Then, top with the remaining bread cubes, ensuring an even distribution.
In another bowl, whisk together the eggs, 2 cups milk, white sugar, vanilla, and cinnamon until well combined. This egg mixture is crucial for soaking the bread.
Pour the egg mixture over the bread and cream cheese layers, ensuring that every piece of bread is soaked. You might need to gently press the bread down to help it absorb.
Cover the dish with foil and bake for 30 minutes. This helps the bread to get fluffy and set without browning too quickly.
After 30 minutes, remove the foil and continue baking for another 20 to 25 minutes. You want the center to be set and the top to be golden brown.
While the casserole bakes, prepare the strawberry sauce. In a saucepan, combine water, white sugar, and cornstarch. Cook over medium-high heat until it begins to boil, stirring frequently.
Once boiling, allow to boil for 3 to 4 minutes until it thickens. Stir in the remaining chopped strawberries and reduce the heat to medium-low, cooking for another 10 to 12 minutes until the sauce is thickened and bright red.
Once your Strawberry French Toast Bake is done, let it stand for a few minutes before serving. This allows it to set slightly and makes serving easier.
Spoon warm strawberry sauce over each slice and serve hot. Enjoy!