Request to Release Domain from Previous Microsoft 365 Account

First check whether the domain is already listed as Unverified in your own Microsoft Entra tenant; if it is not, the correct release path depends on whether the previous Microsoft 365 directory is unmanaged or managed.

1. Check your own Microsoft Entra tenant

A newly purchased domain can produce an “already in use” message after it was partially added to the intended tenant.

1. Sign in to the Azure portal with the administrator account for your new Microsoft 365 organization.
2. Open Microsoft Entra ID → Custom domain names.
3. Look for the affected domain:
   • If it appears as Unverified, select it and choose Verify.
   • Add or retain the requested TXT record in GoDaddy DNS, then complete verification.
4. Return to the Microsoft 365 admin center → Settings → Domains.
5. Select the domain → Start setup, then complete the DNS setup wizard.

This exact scenario has been resolved where the domain was registered as unverified in the purchaser’s own Entra directory rather than being held by a previous owner’s tenant.^1^

Microsoft permits a custom domain to be verified in only one Microsoft Entra tenant at a time.^2^

2. If the domain is attached to an inaccessible managed tenant

If the domain is absent from your Entra Custom domain names, or verifying it there does not clear the error, submit a Microsoft 365 support request for manual domain removal:

1. Sign in to the Microsoft 365 admin center as an administrator.
2. Select Help & support at the bottom-right.
3. Enter: Request assistance to remove a domain associated with an inaccessible tenant.
4. If the suggested results do not resolve it, select Contact Support and choose phone or email.^3^
5. Include:
   • The exact error displayed when adding the domain.
   • Confirmation that you recently acquired the domain.
   • Whether the error explicitly identifies GoDaddy or another organization.
   • A request to confirm that the custom-domain association is fully cleared.
6. Be ready to prove ownership by adding a Microsoft-provided TXT record to the domain’s DNS.

Microsoft documents support-assisted manual removal when the normal domain-removal process cannot be completed.^4^ A closely matching case involving a domain previously attached to an inaccessible tenant was resolved by Microsoft’s Data Protection team.^5^

If all Microsoft 365 subscriptions were purchased through GoDaddy rather than Microsoft, Microsoft’s support guidance says to contact the partner for support. If GoDaddy confirms that it has released the domain but Microsoft 365 still reports the old association, provide that confirmation in the Microsoft ticket.^3^

3. Only if the old directory is unmanaged

An internal admin takeover applies only when the domain belongs to an unmanaged—or “shadow”—directory created through self-service signup and that directory has no Global Administrator. It does not apply to an ordinary GoDaddy-managed or otherwise managed tenant.^6^

If Microsoft or the sign-up process confirms that the directory is unmanaged:

1. On the Power BI site, select Start Free and register or sign in with an address on the affected domain.
2. Validate the verification code sent to that address.
3. Create the requested account, then open the Microsoft admin center.
4. Complete the admin-takeover wizard by adding its TXT record to GoDaddy DNS.
5. After becoming administrator, create or retain a Global Administrator account using the tenant’s .onmicrosoft.com domain.
6. In the Microsoft 365 admin center, open Settings → Domains, select the custom domain, and choose Remove.
7. Sign in to your intended tenant and add the domain there.^6^

If the old tenant is accessible to its administrator, that administrator can instead remove the domain after changing any users, aliases, groups, mailboxes, and administrator sign-ins that reference it.^4^

References

1. Cannot add domain to M365 tenant — "already in use" — domain newly purchased today - Microsoft Q&A
2. Manage custom domain names in your Microsoft Entra ID
3. Get support for Microsoft 365 for business
4. Remove a domain from Microsoft 365
5. Cannot add domain to Microsoft 365 tenant because it was previously used with an older tenant. - Microsoft Q&A
6. Perform an internal admin takeover