Terraform Azure

---
name: terraform-azure
description: Provision Azure infrastructure with Terraform. Configure providers, manage
  state, and deploy resources. Use when implementing IaC for Azure.
category: devops
risk: critical
source: https://github.com/BagelHole/DevOps-Security-Agent-Skills
source_repo: BagelHole/DevOps-Security-Agent-Skills
source_type: community
date_added: '2026-09-20'
license: MIT
license_source: https://github.com/BagelHole/DevOps-Security-Agent-Skills/blob/main/LICENSE
compatibility: Requires the relevant OS/platform tooling and privileged access where
  noted. Docs-only; helper scripts and templates not bundled.
metadata:
  author: devops-skills
  version: '1.0'
---

# Terraform Azure

Provision and manage Azure infrastructure with Terraform using the AzureRM provider. Covers provider configuration, remote state, resource groups, VNets, AKS, Key Vault, complete .tf file examples, and production workflows.

## Prerequisites

```bash
# Prerequisite: reviewed, organization-approved Terraform package installed.
# Verify installation
terraform version

# Install Azure CLI and login
# Prerequisite: organization-approved Azure CLI installed from a verified signed package.
az version
az login
az account set --subscription "my-subscription-id"

# Create storage account for remote state
az group create --name tfstate-rg --location eastus
TFSTATE_ACCOUNT="tfstate$(openssl rand -hex 4)"
az storage account create \
  --name "$TFSTATE_ACCOUNT" \
  --resource-group tfstate-rg \
  --sku Standard_LRS \
  --encryption-services blob
az storage container create \
  --name tfstate \
  --account-name "$TFSTATE_ACCOUNT" --auth-mode login
```

These historical AzureRM3.x/AzureAD2.x fragments must be evaluated against a pinned compatible provider/lockfile; do not silently upgrade to latest. Confirm subscription/tenant and use short-lived least-privilege credentials. Provisioning/state changes require an approved target, cost review and recoverable plan. Restrict/encrypt/version the backend and grant intended Blob data roles; `sensitive` only redacts display, not secrets in state/plans. Save artifacts privately and never commit credentials/state.

## Provider Configuration

### providers.tf

```hcl
terraform {
  required_version = ">= 1.5.0"

  required_providers {
    azurerm = {
      source  = "hashicorp/azurerm"
      version = "~> 3.80"
    }
    azuread = {
      source  = "hashicorp/azuread"
      version = "~> 2.47"
    }
    random = {
      source  = "hashicorp/random"
      version = "~> 3.6"
    }
  }

  backend "azurerm" {
    resource_group_name  = "tfstate-rg"
    storage_account_name = "REPLACE_WITH_CREATED_ACCOUNT"
    use_azuread_auth     = true
    container_name       = "tfstate"
    key                  = "prod.terraform.tfstate"
  }
}

provider "azurerm" {
  features {
    key_vault {
      purge_soft_delete_on_destroy    = false
      recover_soft_deleted_key_vaults = true
    }
    resource_group {
      prevent_deletion_if_contains_resources = true
    }
  }
  # Optional: use a specific subscription
  # subscription_id = var.subscription_id
}

provider "azuread" {}
```

### variables.tf

```hcl
variable "environment" {
  description = "Environment name (dev, staging, prod)"
  type        = string
  validation {
    condition     = contains(["dev", "staging", "prod"], var.environment)
    error_message = "Environment must be dev, staging, or prod."
  }
}

variable "location" {
  description = "Azure region for all resources"
  type        = string
  default     = "eastus"
}

variable "project_name" {
  description = "Project name used in resource naming"
  type        = string
  default     = "myapp"
}

variable "tags" {
  description = "Tags applied to all resources"
  type        = map(string)
  default     = {}
}

variable "sql_admin_password" {
  description = "SQL Server admin password"
  type        = string
  sensitive   = true
}

variable "allowed_ip_ranges" {
  description = "Approved Key Vault administrator IP ranges"
  type = list(string)
  default = []
}

variable "kubernetes_version" {
  description = "Explicit AKS version verified supported for the target region"
  type = string
}

variable "aks_admin_group_id" {
  description = "Azure AD group ID for AKS admin access"
  type        = string
}

locals {
  name_prefix = "${var.project_name}-${var.environment}"
  common_tags = merge(var.tags, {
    environment = var.environment
    project     = var.project_name
    managed_by  = "terraform"
  })
}
```

### terraform.tfvars (per environment)

```hcl
# terraform.prod.tfvars
environment        = "prod"
location           = "eastus"
project_name       = "myapp"
aks_admin_group_id = "xxxxxxxx-xxxx-xxxx-xxxx-xxxxxxxxxxxx"

tags = {
  cost_center = "engineering"
  owner       = "platform-team"
}
```

## Resource Group

### resource-group.tf

```hcl
resource "azurerm_resource_group" "main" {
  name     = "${local.name_prefix}-rg"
  location = var.location
  tags     = local.common_tags
}
```

## Virtual Network

### network.tf

```hcl
resource "azurerm_virtual_network" "main" {
  name                = "${local.name_prefix}-vnet"
  location            = azurerm_resource_group.main.location
  resource_group_name = azurerm_resource_group.main.name
  address_space       = ["10.0.0.0/16"]
  tags                = local.common_tags
}

resource "azurerm_subnet" "aks" {
  name                 = "aks-subnet"
  resource_group_name  = azurerm_resource_group.main.name
  virtual_network_name = azurerm_virtual_network.main.name
  address_prefixes     = ["10.0.0.0/22"]
  service_endpoints    = ["Microsoft.KeyVault"]
}

resource "azurerm_subnet" "app" {
  name                 = "app-subnet"
  resource_group_name  = azurerm_resource_group.main.name
  virtual_network_name = azurerm_virtual_network.main.name
  address_prefixes     = ["10.0.8.0/24"]
  service_endpoints    = ["Microsoft.KeyVault"]
}

resource "azurerm_subnet" "data" {
  name                 = "data-subnet"
  resource_group_name  = azurerm_resource_group.main.name
  virtual_network_name = azurerm_virtual_network.main.name
  address_prefixes     = ["10.0.9.0/24"]

  private_endpoint_network_policies_enabled = true
}

resource "azurerm_network_security_group" "app" {
  name                = "${local.name_prefix}-app-nsg"
  location            = azurerm_resource_group.main.location
  resource_group_name = azurerm_resource_group.main.name

  security_rule {
    name                       = "AllowHTTPS"
    priority                   = 100
    direction                  = "Inbound"
    access                     = "Allow"
    protocol                   = "Tcp"
    source_port_range          = "*"
    destination_port_range     = "443"
    source_address_prefix      = "*"
    destination_address_prefix = "*"
  }

  tags = local.common_tags
}

resource "azurerm_subnet_network_security_group_association" "app" {
  subnet_id                 = azurerm_subnet.app.id
  network_security_group_id = azurerm_network_security_group.app.id
}
```

## AKS Cluster

### aks.tf

```hcl
resource "azurerm_log_analytics_workspace" "aks" {
  name                = "${local.name_prefix}-law"
  location            = azurerm_resource_group.main.location
  resource_group_name = azurerm_resource_group.main.name
  sku                 = "PerGB2018"
  retention_in_days   = 30
  tags                = local.common_tags
}

resource "azurerm_kubernetes_cluster" "main" {
  name                = "${local.name_prefix}-aks"
  location            = azurerm_resource_group.main.location
  resource_group_name = azurerm_resource_group.main.name
  dns_prefix          = "${var.project_name}-${var.environment}"
  kubernetes_version  = var.kubernetes_version  # verified supported in region

  default_node_pool {
    name                = "system"
    vm_size             = "Standard_D4s_v5"
    enable_auto_scaling = true
    min_count           = 2
    max_count           = 5
    zones               = [1, 2, 3]
    vnet_subnet_id      = azurerm_subnet.aks.id
    os_disk_size_gb     = 128
    os_disk_type        = "Managed"
    max_pods            = 50

    node_labels = {
      role = "system"
    }
  }

  identity {
    type = "SystemAssigned"
  }

  network_profile {
    network_plugin    = "azure"
    network_policy    = "calico"
    service_cidr      = "10.1.0.0/16"
    dns_service_ip    = "10.1.0.10"
    load_balancer_sku = "standard"
  }

  azure_active_directory_role_based_access_control {
    managed                = true
    azure_rbac_enabled     = true
    admin_group_object_ids = [var.aks_admin_group_id]
  }

  oms_agent {
    log_analytics_workspace_id = azurerm_log_analytics_workspace.aks.id
  }

  key_vault_secrets_provider {
    secret_rotation_enabled  = true
    secret_rotation_interval = "2m"
  }

  tags = local.common_tags
}

resource "azurerm_kubernetes_cluster_node_pool" "app" {
  name                  = "app"
  kubernetes_cluster_id = azurerm_kubernetes_cluster.main.id
  vm_size               = "Standard_D8s_v5"
  enable_auto_scaling   = true
  min_count             = 2
  max_count             = 20
  zones                 = [1, 2, 3]
  vnet_subnet_id        = azurerm_subnet.aks.id
  max_pods              = 50

  node_labels = {
    workload = "app"
  }

  node_taints = [
    "dedicated=app:NoSchedule"
  ]

  tags = local.common_tags
}
```

## Key Vault

### keyvault.tf

```hcl
data "azurerm_client_config" "current" {}

resource "azurerm_key_vault" "main" {
  name                        = "${var.project_name}-${var.environment}-kv"
  location                    = azurerm_resource_group.main.location
  resource_group_name         = azurerm_resource_group.main.name
  tenant_id                   = data.azurerm_client_config.current.tenant_id
  sku_name                    = "standard"
  soft_delete_retention_days  = 90
  purge_protection_enabled    = true
  enabled_for_disk_encryption = true

  network_acls {
    default_action = "Deny"
    bypass         = "AzureServices"
    ip_rules       = var.allowed_ip_ranges
    virtual_network_subnet_ids = [
      azurerm_subnet.app.id,
      azurerm_subnet.aks.id,
    ]
  }

  tags = local.common_tags
}

resource "azurerm_key_vault_access_policy" "terraform" {
  key_vault_id = azurerm_key_vault.main.id
  tenant_id    = data.azurerm_client_config.current.tenant_id
  object_id    = data.azurerm_client_config.current.object_id

  secret_permissions = [
    "Get", "List", "Set", "Delete", "Recover"
  ]

  key_permissions = [
    "Get", "List", "Create", "Delete", "Recover",
    "WrapKey", "UnwrapKey"
  ]
}

resource "azurerm_key_vault_access_policy" "aks" {
  key_vault_id = azurerm_key_vault.main.id
  tenant_id    = data.azurerm_client_config.current.tenant_id
  object_id    = azurerm_kubernetes_cluster.main.key_vault_secrets_provider[0].secret_identity[0].object_id

  secret_permissions = ["Get", "List"]
}

resource "azurerm_key_vault_secret" "sql_password" {
  name         = "sql-admin-password"
  value        = var.sql_admin_password
  key_vault_id = azurerm_key_vault.main.id

  depends_on = [azurerm_key_vault_access_policy.terraform]
}
```


## Contents

- [SQL Database](references/details.md)
- [Outputs](references/details.md)
- [Terraform Workflow Commands](references/details.md)
- [Module Structure](references/details.md)
- [Troubleshooting](references/details.md)
- [Related Skills](references/details.md)

## When to Use

- You need multi-cloud or cloud-agnostic Infrastructure as Code.
- Your team standardizes on Terraform across AWS, Azure, and GCP.
- You need plan/apply workflows with change preview before deployment.
- You want modular, reusable infrastructure components.
- You need state locking and drift detection for production infrastructure.

## Limitations

- Infrastructure commands can disrupt services: confirm target host/scope and have backups/snapshots before mutating state.
- Docs-only import: upstream scripts and templates not bundled.