Brown Italian sausage in a medium non-stick skillet over medium heat, using a wooden spoon to break the sausage into small bits. Cook until sausage is browned, about 7-9 minutes.
Add the diced peppers and onions to the pan, along with salt and pepper, and cook for additional 4 minutes.
Spray baking dish with cooking spray and scatter the sausage and veggie mixture all over the bottom of pan in single layer.
Whisk together eggs and water in a medium bowl then pour on top of the sausage and veggies. Sprinkle pan with shredded cheese then bake until eggs are set, about 30 minutes. Serve warm or refrigerate for up to 7 days.