That is a good question; this exposes an idealization in the textbook formalism of Quantum Mechanics which is known not to apply exactly in real life. Notably, you realized that if the probability density is
$$|\Psi(\vec{x},0)|^2 = \delta(\vec{x})$$
Then what is the wave function itself? We don't have a square root of a delta function. Often the wave function might just be taken as a delta function itself, but this is of course not consistent because $\delta(\vec{x})^2 \neq \delta(\vec{x})$.
The answer, therefore, is that the wave function after measurement is not an exact delta function. This can also be seen by other means, and in fact there is no less than direct experimental evidence which is in contradiction with an exact delta function. Consider the way that momentum is measured by pixel detectors at the LHC:

The particle to detect traverses through a constant magnetic field, which induces circular motion. The volume of the detector contains many tiny pieces of silicon called pixel detectors. As the particle passes through these penetrable pieces of silicon, its position is recorded many times. These positions can be fit to a circle, and the radius of the circle determines the momentum through the simple relationship
$$|\vec{p}| = q|B|r$$
Now, what would we see if, after the first position was recorded, the wave function collapsed to an exact delta function in position? In this case, its momentum wave function would be
$$\psi(\vec{p}) = \langle \vec{p}|\psi \rangle = \langle p|x \rangle = e^{-i\vec{p} \cdot \vec{x}}$$
Which gives us
$$|\psi(\vec{p})|^2 = |e^{-i\vec{p}\cdot\vec{x}}|^2 = 1$$
Thus each momentum in $\mathbb{R^3}$ would be equally likely. We would expect a huge jolt in the motion of the particle, even to the extent that it could be found macroscopic distances away in fractions of a second. However, this is not what we see. Here are some reconstructed tracks from the LHC:

As you can see, we have particles moving in nicely-defined circles of relatively constant radii. Neutral particles are of course not bent by the magnetic field. This is not consistent with the infinite jolt that a particle which suddenly transitioned to an actual delta function would experience.
The delta function is just an approximation. If you want something "close enough", you can try
$$\psi(\vec{x},0) = \delta(\vec{x})$$
or else plug in a gaussian whose width is roughly equal to the experimental uncertainty, as a band-aid. But you are looking to know what is correct "in principle", you would have to look outside of textbook quantum mechanics.