PREHEAT oven to 350°F. Prepare cake batter as directed on package. Pour into greased 13x9-inch baking dish; set aside.
POUR milk and water into large bowl. Add dry pudding mixes and granulated sugar. Beat with wire whisk 2 min. or until well blended. Pour over batter. Place baking dish on baking sheet to catch any sauce that might bubble over sides of dish as dessert bakes.
BAKE 55 min. to 1 hour or until wooden toothpick inserted in center comes out clean. Cool 20 min. (Sauce will thicken slightly as it cools.) Sprinkle with powdered sugar. Spoon into serving dishes to serve warm. Store leftovers in refrigerator.