Preheat your oven to 325°F (163°C). Lightly spray your baking dish (9×9-inch) with cooking spray and set aside.
In a large mixing bowl, whisk together the egg yolks and granulated sugar until the mixture becomes thick and pale. Add the melted butter, vanilla extract, and cold water. Whisk until combined.
In a separate bowl, sift together the all-purpose flour and fine salt to remove any lumps. Gradually add this dry mixture to the wet ingredients, mixing well until smooth.
In another clean bowl, beat the egg whites with a hand mixer or stand mixer on medium-high speed until stiff peaks form (this can take around 3-5 minutes). This will create the airy texture of the cake.
Gently fold the whipped egg whites into the batter in batches. Be careful not to deflate the egg whites; use a spatula and fold from the bottom upwards until fully combined. The batter will be a bit lumpy, and that’s okay!
Slowly pour in the warm milk, stirring gently to combine. This will thin the batter slightly, but it helps create the cake’s magic texture.
Pour the batter into the prepared baking dish and smooth out the top. Bake for 40-45 minutes or until the top is golden brown and a toothpick inserted into the center comes out clean.
Allow the cake to cool in the pan for about 10 minutes before transferring it to a cooling rack. Once completely cooled, dust the top with powdered sugar.
Slice into squares and serve. Enjoy the light, airy, and delicious Magic Vanilla Cake Recipe!