In a large mixing bowl, combine the warmed milk, granulated sugar, and active dry yeast. Stir gently and allow this mixture to sit for about 5-10 minutes, or until it becomes frothy, indicating the yeast is active.
In a separate bowl, whisk together the all-purpose flour and salt. Create a well in the center of the flour mixture.
Pour the frothy yeast mixture, melted butter, and room temperature eggs into the well of the flour mixture. Stir with a wooden spoon or spatula until a cohesive dough begins to form.
Transfer the dough to a lightly floured surface. Knead the dough for approximately 8-10 minutes, or until it becomes smooth and elastic.
Lightly grease a large bowl, place the kneaded dough inside, then cover it with a clean kitchen towel. Allow the dough to rise in a warm spot for about 1-2 hours, or until it has doubled in size.
Once the dough has risen, gently punch it down to release the air. Roll it out into a rectangle approximately ¼ inch thick on a floured surface.
Evenly spread the chocolate hazelnut spread over the entire surface of the rectangle, ensuring it reaches the edges. Next, sprinkle the chopped and toasted hazelnuts uniformly on top of the spread.
Starting from one long edge of the rectangle, carefully roll the dough tightly into a log shape. Pinch the seams firmly to seal the roll.
Using a sharp knife, cut the log in half lengthwise to create two long strands. With the cut sides facing upward, twist the two pieces together gently, forming a beautiful braided shape.
Place the twisted dough into a greased 9x5 inch loaf pan. Cover it loosely with a kitchen towel and let it rise for another 30-45 minutes, or until it puffs up slightly.
During the final rise, preheat your oven to 350°F (175°C).
Once the dough has puffed, whisk the remaining egg and brush it generously over the top of the babka to give it a beautiful golden sheen while baking.
Place the loaf pan in the preheated oven and bake for 30-35 minutes. The babka should be golden brown and a toothpick inserted into the center should come out clean.
After baking, allow the babka to cool in the pan for about 15 minutes. Carefully transfer it to a wire rack to cool completely.
Just before slicing, dust the top with powdered sugar for an elegant touch, if desired.