Azure Extension for SQL Server (WindowsAgent.SqlServer) stuck in Creating for more than 5 hours on Azure Arc-enabled SQL Server 2025

We are experiencing an issue deploying the Azure Extension for SQL Server (WindowsAgent.SqlServer) on an Azure Arc-enabled machine running SQL Server 2025.

Environment

Arc-enabled machine: U-GWGQ654

Resource group: rg-itajibabezerra-9239

Azure region: Australia East

Operating system: Windows 11 Enterprise

SQL Server: SQL Server 2025

SQL instance: MSSQLSERVER

Extension: Microsoft.AzureData.WindowsAgent.SqlServer

Extension version being deployed: 1.1.3579.481

Previous locally installed extension version: 1.1.3453.436

Problem

We need to enable Use a primary managed identity for the SQL Server instance so that SQL Server 2025 can use the Arc machine's system-assigned managed identity.

In Microsoft Entra ID and Purview, I can select Use a primary managed identity, but the Save button cannot be used because Azure displays the warning:

Azure extension for SQL Server is currently processing a request. Values below may be incorrect. Please wait until the agent is done before continuing.

The WindowsAgent.SqlServer extension remains in Creating state for several hours.

The latest attempt has now remained in Creating for more than 5 hours.

The Azure portal deployment also reports:

The resource provision operation did not complete within the allowed timeout period.

Code: ResourceDeploymentFailure

Target:

/subscriptions/<subscription ID>/resourceGroups/rg-itajibabezerra-9239/providers/Microsoft.HybridCompute/machines/U-GWGQ654/extensions/WindowsAgent.SqlServer

Troubleshooting already performed

1. Verified Azure Arc connectivity

On U-GWGQ654, we ran:

azcmagent check

All tested core Azure Arc endpoints were reachable, including:

https://agentserviceapi.guestconfiguration.azure.com

https://australiaeast-gas.guestconfiguration.azure.com

https://gbl.his.arc.azure.com

https://login.microsoftonline.com

https://management.azure.com

https://pas.windows.net

All reported:

Reachable: true

TLS: TLS 1.3

Proxy: not used

We also tested:

Test-NetConnection management.azure.com -Port 443

Result:

TcpTestSucceeded : True

Therefore, there is no evidence of a general outbound Azure Arc network/firewall connectivity problem.

2. Verified Arc and SQL extension services

The Arc extension service is running:

Name : ExtensionService

Status : Running

StartType : Automatic

The SQL Server extension service was also running before the extension was removed:

Name : SqlServerExtension

DisplayName : Microsoft Sql Server Extension Service

Status : Running

StartType : Automatic

3. Verified SQL Server extension operation locally

unifiedagent.log showed:

SQL connection test of instance MSSQLSERVER is True.

It also showed:

Plugin status: {"State":"Running","MetricsUploadStatus":"OK"}

and repeatedly reported successful extension status:

status:"success"

code:0

WorkloadState=success

The extension could also successfully communicate with the local HIMDS endpoint and received HTTP 200 responses.

4. Identified extension version mismatch

Azure was reporting:

WindowsAgent.SqlServer

typeHandlerVersion: 1.1.3579.481

provisioningState: Creating

However, the locally installed extension was:

C:\Packages\Plugins\Microsoft.AzureData.WindowsAgent.SqlServer\1.1.3453.436

Only the following version was present under the local Plugins directory:

1.1.3453.436

The Guest Configuration extension logs contained directories for:

1.1.3394.392

1.1.3453.436

There was no local directory or log entry for version 1.1.3579.481.

A recursive search under:

C:\ProgramData\GuestConfig

for:

1.1.3579.481

returned no results.

This suggested that Azure had registered an upgrade/deployment request for 1.1.3579.481, but the requested extension version was not reaching/installing on the Arc machine.

5. Removed the stuck extension following Microsoft guidance

Because the extension had remained in Creating for an extended period, we followed Microsoft's documented procedure for a SQL Server Azure Arc extension stuck in Creating/Deleting.

The existing WindowsAgent.SqlServer extension was removed.

After deletion, this command:

az connectedmachine extension show \

--machine-name U-GWGQ654 \

--resource-group rg-itajibabezerra-9239 \

--name WindowsAgent.SqlServer

correctly returned:

ResourceNotFound

confirming that the extension resource had been deleted.

The Machine - Azure Arc resource itself remained registered and healthy.

6. Attempted a clean reinstall

We then opened:

Azure Arc

→ Machines

→ U-GWGQ654

→ Extensions

→ Add

→ Azure extension for SQL Server

and initiated a new installation.

The installation again attempted to deploy:

WindowsAgent.SqlServer

Version: 1.1.3579.481

Automatic upgrade: Enabled

However, the new deployment failed with:

The resource provision operation did not complete within the allowed timeout period.

Code: ResourceDeploymentFailure

The extension nevertheless remains visible in the Azure portal with:

Status: Creating

Version: 1.1.3579.481

It has now remained in this state for more than 5 hours.

Current impact

Because WindowsAgent.SqlServer never reaches Succeeded, we cannot complete the SQL Server 2025 managed identity configuration.

Specifically:

SQL Server - Azure Arc

→ Microsoft Entra ID and Purview

→ Use a primary managed identity

cannot be successfully saved while Azure reports that the SQL extension is processing a request.

This prevents us from configuring the primary managed identity, which is required for our SQL Server 2025 workload to authenticate to Azure resources using Managed Identity.

Assistance requested

Please investigate why Microsoft.AzureData.WindowsAgent.SqlServer version 1.1.3579.481 does not complete provisioning on this Arc-enabled machine.

In particular, please help determine:

Why the extension remains in Creating even though the Arc agent has healthy Azure connectivity.

Why deployment of version 1.1.3579.481 does not appear to reach/install on the machine.

Whether there is a known issue with WindowsAgent.SqlServer version 1.1.3579.481.

Whether the Azure-side extension provisioning state or operation needs to be manually reset.

How we can successfully deploy the extension and subsequently enable Use a primary managed identity for the SQL Server 2025 instance.

We can provide unifiedagent.log, gc_ext.log, deployer logs, Arc agent diagnostics, and additional traces if required.