Preheat the oven to 350°F (175°C).
In a large mixing bowl, combine the cream of mushroom soup, sour cream, milk, melted butter, finely chopped onion, garlic powder, paprika (if using), salt, and pepper. Whisk until smooth.
Grease the 9x13-inch baking dish with cooking spray or butter.
Layer half of the sliced potatoes at the bottom of the greased baking dish.
Pour half of the soup mixture over the potatoes, followed by half of the shredded cheddar cheese.
Repeat the layers with the remaining potatoes, soup mixture, and cheddar cheese.
Cover the baking dish with aluminum foil and bake in the preheated oven for 45 minutes.
After 45 minutes, remove the foil, sprinkle the additional shredded cheese on top, and bake for an additional 15 minutes or until the cheese is melted and bubbly and the potatoes are tender.
Remove from the oven and let it sit for about 5-10 minutes before serving.