Line 8-inch square pan with aluminum foil, extending foil over edges. Butter foil.
Combine butter, milk and chocolate chips in large microwave-safe bowl. Microwave 2-3 minutes or until butter and chocolate chips are melted.
Stir in powdered sugar and vanilla; beat at medium speed, scraping bowl often, until smooth. Spread into prepared pan. Cover; refrigerate 1 to 1 1/2 hours or until firm. Lift fudge from pan using foil ends; cut into squares.
To give fudge as a gift, place in new baking pan and wrap with decorative paper or colored food wrap.