Create a Multi-Level Cascading Select field (Cloud)
This is how to create a Multi-Level Cascade Select custom field:
Go to Settings → Work items.
Go to Fields → Create new field.
Choose the Multi-Level Cascading Select type, a name and, optionally, a description for your new custom field.
Click on Create.
Add the field to the configuration schemes
Now, you can move in the Context and default values page to create new options, set and change the default value or change the configuration scheme: