In a large skillet, cook the breakfast sausage and chopped onion over medium-high heat until the sausage is browned and the onion is tender. Drain off any excess grease.
Sprinkle the flour over the sausage mixture and stir to combine. Cook for 1 minute, stirring constantly.
Gradually whisk in the milk until smooth. Bring the mixture to a simmer, stirring constantly. Cook until thickened, about 5 minutes.
Stir in the salt and black pepper. Remove from heat.
Separate the biscuit dough into 8 biscuits. Cut each biscuit into quarters.
Spread half of the biscuit pieces evenly over the bottom of a 9×13 inch baking dish.
Pour the sausage gravy mixture over the biscuits.
Top with the remaining biscuit pieces and sprinkle with shredded cheddar cheese.
Bake for 25-30 minutes, or until the biscuits are golden brown and the casserole is bubbly.
Let stand for 5 minutes before serving.
Notes
For a make-ahead option, assemble the casserole up to the point of baking, cover, and refrigerate. Bake within 24 hours, adding a few extra minutes to the baking time if needed.
To rewarm, cover the casserole with foil and bake at 350°F (175°C) until heated through.
Serve with your favorite brunch sides like scrambled eggs, fruit salad, or crispy bacon.