Preheat oven to 350 degrees F.
In large bowl, with mixer at low speed, beat sugar and margarine or butter until blended.
Increase speed to high; beat until light and fluffy, about 5 minutes. At medium speed, beat in ricotta, Nutella, vanilla, and eggs until well combined.
Reduce speed to low. Add flour, baking powder, and salt; beat until dough forms.
Drop dough by level tablespoons, or with an ice cream scoop about 2 inches apart, onto ungreased large cookie sheet. Bake about 12-15 minutes (cookies will be soft on the inside). With pancake turner, remove cookies to wire rack to cool. Repeat with remaining dough.
When cookies are cool, prepare icing: In small bowl, stir confectioners sugar and milk until smooth. With small metal spatula or knife, spread icing on cookies; sprinkle with sprinkles of your choice. Set cookies aside to allow icing to dry completely, about 1 hour.