Preheat oven to 350 degrees F. Line a baking sheet with parchment paper. Set aside.
In the bowl of a stand mixer fitted with the paddle attachment, beat the butter, white sugar, brown sugar, peanut butter, egg, and vanilla together on medium speed until fluffy.
Slowly add the dry ingredients to wet mixture, beating on low speed until well blended.
Fold in the one cup M&M candies and sprinkles and blend with a spoon. Reserve the 1/3 cup for placing on top when they come out of the oven.
Drop a tablespoon of dough onto the prepared baking sheet.
Bake cookies 12 minutes until golden brown.
Immediately after removing from the oven, carefully press 2-3 pieces of M&M's candies to the top of the cookies. Place the cookies onto a wire rack to cool completely.