In 10-inch skillet, cook sausage over medium-high heat 8 to 10 minutes, stirring frequently, until no longer pink; drain.
In ungreased 13x9-inch (3-quart) glass baking dish, mix water, pizza sauce and tomatoes. Stir in cooked sausage, uncooked pasta and olives (pasta should be completely covered with sauce). Cover tightly with foil; refrigerate at least 8 hours or overnight.
When ready to bake, heat oven to 350°F. Stir casserole; cover with foil and bake 1 hour to 1 hour 15 minutes or until bubbly.
Uncover baking dish; stir mixture. Sprinkle with cheese; bake uncovered 5 minutes longer or until cheese is melted.