Prepare the 8x8-inch baking pan by lining it with parchment paper, leaving some overhang for easy removal later.

In a medium saucepan, combine sweetened condensed milk and chocolate chips over low heat. Stir constantly for about 5 to 7 minutes until melted and smooth.

Remove from heat and stir in vanilla extract. Add mini marshmallows and fold gently, being careful not to overmix.

Pour the fudge mixture into the prepared pan and spread evenly while gently swirling the mixture.

Let cool at room temperature for about 10 minutes, then transfer to the refrigerator to chill for at least 2 hours until firm.

Lift the fudge from the pan using the parchment overhang, then slice into 16 squares using a buttered knife.