Transfer domain to GoDaddy

Transferring the domain registration to GoDaddy will not remove its Microsoft 365 tenant association; first determine whether the previous tenant is unmanaged, then either take it over or request Microsoft Support to release the domain.

1. Confirm what must be changed

These are separate items:

• Registrar/DNS ownership: where the domain is registered and its DNS records are managed, such as GoDaddy.
• Microsoft 365 tenant association: the Microsoft organization where the domain has been verified.

A custom domain can be verified in only one Microsoft Entra tenant at a time.^1^ If the domain is already in your GoDaddy account, no registrar transfer is necessary—you need the old Microsoft tenant association released.

Being redirected to Microsoft 365 during GoDaddy email setup is not, by itself, evidence of a problem. Continue until GoDaddy or Microsoft displays an error such as “domain is already added to a different Microsoft 365 organization.”

2. If the previous tenant is unmanaged

An unmanaged tenant can result from an earlier user signing up for a Microsoft cloud service with an address at that domain. Microsoft provides an internal admin takeover process for this case:

1. Create an account in the unmanaged organization through the documented Power BI self-service signup process.
2. Sign in to the Microsoft 365 admin takeover page with that account.
3. Select Yes, I want to be the admin.
4. At GoDaddy, add the TXT record Microsoft supplies to prove domain ownership.
5. After verification, create an administrator using the tenant’s .onmicrosoft.com domain.
6. In the Microsoft 365 admin center → Settings → Domains, select the custom domain and choose Remove.^2^

Before removal, Microsoft requires users, groups, email/proxy addresses, and application identifiers referencing the custom domain to be renamed or removed.^1^

Once removed, return to GoDaddy and restart the email setup.

3. If takeover is unavailable or reports that the domain is managed

An external or internal takeover does not provide a self-service release from an inaccessible, managed Microsoft 365 tenant. In that situation:

1. Gather proof that the domain is in your GoDaddy account:
   • Registrar ownership details or invoice.
   • Ability to create a DNS TXT record.
   • Business ownership documentation if requested.
2. If you have any Microsoft 365 administrator account, open: Microsoft 365 admin center → Help & Support → Contact support.^3^
3. Request domain recovery/release because the domain is verified in an inaccessible previous tenant.
4. Complete Microsoft’s ownership-validation process.
5. After Microsoft confirms release, restart GoDaddy’s email setup and add the requested DNS records.

A managed tenant cannot be force-removed by the new domain owner through GoDaddy DNS alone; Microsoft Support must validate ownership and determine whether it can release the domain.^4^

Do not delete existing MX or other email DNS records until GoDaddy provides the replacement records and confirms the mailbox setup, because changing them can interrupt current mail delivery.

References

1. Manage custom domain names in your Microsoft Entra ID
2. Take over an unmanaged directory as administrator in Microsoft Entra ID
3. Add a custom domain to Microsoft 365
4. I cannot link my domain because is linked in other tenant which I don't have access - Microsoft Q&A