Preheat the oven to 325 degrees F. Toss the apples with sugar and cinnamon; set aside.
Beat the eggs, milk, and vanilla in a large bowl with wire whisk until well blended. Add the bread cubes, sausage, the apple mixture and 1 1/2 cups cheese; stir gently until evenly coated.
Spoon into a lightly greased 13-inch by 9-inch baking dish; top with the remaining 1/2 cup cheese.
Bake 40 to 45 minutes or until a knife inserted in the center comes out clean. Let stand 10 minutes before cutting into 12 squares to serve.
Make-Ahead Breakfast Casserole:
Assemble the casserole as directed. Refrigerate overnight. When ready to serve, uncover the casserole and bake 50 to 55 minutes or until a knife inserted in the center comes out clean.