Blend the condensed milk and the vanilla together in a bowl. Add the powdered sugar a little at a time, blending each time until smooth. Stir in the coconut. You should have a firm mixture. Pat the mixture into a greased 9 x 13 inch pan and chill until firm.
Place the chocolate chips in a microwave-safe bowl and heat on high 1 minute at a time, stirring after each minute, until melted. Remove the pan from the refrigerator and cut the coconut mixture into 1 x 2 inch bars.
Set each bar on a fork and dip into the chocolate, completely coating the bar. Let excess drip off, then set on waxed paper. Repeat for each bar. Bars will take several hours to air-dry; if you are in a hurry you can refrigerate the bars for about 30 minutes. Enjoy!