Azure Disk Encryption not working

Hello @Sudheer Kumar ,
Thanks for your query. I just created win server 2012 R2 and tried encryption successfully.

Can you try this below troubleshooting details:

• https://social.msdn.microsoft.com/Forums/azure/en-US/bc02c38f-e978-4003-b8b1-f3376cd386ac/failed-to-configure-machine-for-bitlocker-encryption-reboot-the-vm-and-retry-encryption-operation?forum=AzureDiskEncryption

Let us know if those troubleshooting link helps out in resolving the issue , if yes "please accept the answer"

@Sudheer Kumar Welcome to Microsoft Q&A, Thank you for posting your query!

Adding more information to the above answer! Run the below powershell script to encrypt the virtual machine. Let us know the result if the issue still persists

##encrypt the existing virtual machine using below script  
connect-AzAccount  
  
$rgName = "your resource group name"  
$location = "location name"  
  
Register-AzResourceProvider -ProviderNamespace "Microsoft.KeyVault"  
Get-AzResourceGroup -Location $location -Name $rgName  
  
#create a new keyvault  
$keyVaultName = "your key vault name"  
New-AzKeyVault -Location $location `  
    -ResourceGroupName $rgName `  
    -VaultName $keyVaultName `  
    -EnabledForDiskEncryption  
  
Add-AzureKeyVaultKey -VaultName $keyVaultName -Name "myKey" -Destination "Software"  
$keyVault = Get-AzKeyVault -VaultName $keyVaultName -ResourceGroupName $rgName;  
$diskEncryptionKeyVaultUrl = $keyVault.VaultUri;  
$keyVaultResourceId = $keyVault.ResourceId;  
$keyEncryptionKeyUrl = (Get-AzKeyVaultKey -VaultName $keyVaultName -Name myKey).Key.kid;  
  
  
Set-AzVMDiskEncryptionExtension -ResourceGroupName $rgName `  
    -VMName "your vm name" `  
    -DiskEncryptionKeyVaultUrl $diskEncryptionKeyVaultUrl `  
    -DiskEncryptionKeyVaultId $keyVaultResourceId `  
    -KeyEncryptionKeyUrl $keyEncryptionKeyUrl `  
    -KeyEncryptionKeyVaultId $keyVaultResourceId  
  
Get-AzVmDiskEncryptionstatus -ResourceGroupName $rgName -VMName "your Vm name"   

Additional information: How to enable ADE & troubleshooting article

Hope this helps!

Kindly let us know if the above helps or you need further assistance on this issue.

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