An exterior wall cladding system for application to an exterior wall surface comprises a sealed and laminated waterproof wrap applied to the exterior wall surface, a fully-sealed insulating panel without a drainage plane disposed over the sealed and laminated waterproof wrap. The cladding system and method provide a waterproof wall structure for a multi-layer stucco coating applied over the insulating panel. Sealing materials are applied to all openings through and edges of the wall structure.