Combine butter, peanut butter, sugars, egg, and vanilla in a mixer and blend on medium speed until well mixed. Add flour, baking soda and salt and blend again. Add Nutella and mix gently with a spatula until streaks of Nutella are mixed in with the dough.
Roll dough into 1.5″ balls and roll in sugar. Place each ball on a cookie sheet and depress with a fork, then depress again to make a criss cross pattern.
Bake until edges are lightly browned, about 8 minutes. Cool for a couple of minutes on the baking sheet then transfer to a cooling rack.