I would say cut the strip 10.5" long.
If you sew five 2.5" strips together, they will end up a finished width of 10". Add .5" to that for the seam allowance, and you will end up with a 10.5" unfinished square.
Edit: Kathy's right. I would just sew 5 strips together, iron, measure how wide they are, and then cut the strip set in that length. Super accurate!