Activate the Yeast: In a small bowl, combine the lukewarm milk, sugar, and dried yeast. Stir gently and let it sit for about 10 minutes until the mixture becomes frothy. This step is crucial as it activates the yeast, ensuring your bread will rise properly.

Mix the Wet Ingredients: In a large mixing bowl, beat the egg lightly and add the vanilla sugar and salt. Pour in the frothy milk mixture and stir to combine. The vanilla sugar gives the bread a delightful aroma and subtle sweetness that pairs beautifully with the butter.

Incorporate the Dry Ingredients: Gradually add the flour to the wet mixture, stirring continuously until a dough begins to form. The dough should be soft and slightly sticky, but not too wet. If necessary, add a little more flour until the dough reaches the right consistency.

Knead the Dough: Transfer the dough to a floured surface and knead it for about 10 minutes. You’ll know the dough is ready when it’s smooth, elastic, and doesn’t stick to your hands. Kneading develops the gluten in the flour, giving the bread its structure and chewy texture.

Add the Butter: Gradually incorporate the softened butter into the dough, kneading it in bit by bit. The butter should be fully absorbed into the dough, making it even more soft and pliable. This step adds a rich, buttery flavor to the bread that’s truly irresistible.

First Rise: Place the dough in a lightly oiled bowl, cover it with a clean kitchen towel, and let it rise in a warm place for about 1 hour, or until it has doubled in size. The yeast will work its magic, making the dough light and airy.

Shape the Dough: Once the dough has risen, punch it down to release the air bubbles. Transfer it to a floured surface and shape it into a loaf or divide it into smaller rolls, depending on your preference.

Second Rise: Place the shaped dough in a greased baking pan or on a baking sheet lined with parchment paper. Cover it with a towel and let it rise again for 30-45 minutes, or until it has doubled in size.

Bake the Bread: Preheat your oven to 180°C (350°F). Bake the bread for 20-25 minutes, or until the top is golden brown and the bread sounds hollow when tapped. The baking time may vary slightly depending on your oven, so keep an eye on it.

Cool and Dust: Once the bread is done, remove it from the oven and let it cool on a wire rack. Before serving, dust it lightly with icing sugar for an extra touch of sweetness and visual appeal.