Terraform Azure: How to use multiple version of the AzureRM provider?

As of now, it is not possible to use the same provider with multiple versions in the same codebase. You can resolve this by having two options.

• Separating the new resource which requires a new provider in another directory or any logical way which should have a dedicated/explicit provider config and state file. (not recommended as the code will be redundant)

Example directory structure.

.
├── .terraform
│   └── providers
│       └── registry.terraform.io
│           └── hashicorp
│               └── azurerm
│                   └── 3.0.2
│                       └── darwin_amd64
│                           └── terraform-provider-azurerm_v3.0.2_x5
├── .terraform.lock.hcl
├── latest_provider_directory
│   ├── .terraform
│   │   └── providers
│   │       └── registry.terraform.io
│   │           └── hashicorp
│   │               └── azurerm
│   │                   └── 3.32.0
│   │                       └── darwin_amd64
│   │                           └── terraform-provider-azurerm_v3.32.0_x5
│   ├── .terraform.lock.hcl
│   ├── providers.tf
│   └── new_resource.tf
├── providers.tf
└── old_resource.tf

Provider config or providers.tf

## provider config supports old versions.
terraform {
  required_providers {
    azurerm = {
      source  = "hashicorp/azurerm"
      version = "~> 3.0.2"

    }
  }
  required_version = ">= 1.1.0"
}
# Configure the Microsoft Azure provider
provider "azurerm" {
  features {}
}

## provider config supports new versions in latest_provider_directory to support resources with new provider versions.
terraform {
  required_providers {
    azurerm = {
      source  = "hashicorp/azurerm"
      version = "~> 3.32.0"
    }
  }
  required_version = ">= 1.1.0"
}

provider "azurerm" {
  features {}
}

• Upgrading the current terraform code to the newest terraform-provider-azurerm provider. Usually, terraform-provider-azurerm does support backward compatibility but in some edge cases, it is possible that some arguments are deprecated or even modified. (recommended)

terraform {
  required_providers {
    azurerm = {
      source  = "hashicorp/azurerm"
      version = "~> 3.32.0" ## upgrading means updating this version from current to new(required) version.
    }
  }
  required_version = ">= 1.1.0"
}

provider "azurerm" {
  features {}
}

Note: Kindly init and run a plan on your existing code with the new provider version once you upgrade it and verifies that you get the below message either locally or done in pipelines.

No changes. Your infrastructure matches the configuration.

Also going through azurerm-terraform-provider-Changelog would be good to get more insights.

As a side note Version constraints inside provider configuration blocks are deprecated and will be removed in a future version of Terraform

Tested this warning with terraform version 1.3.5

Your new update module has an explicit provider config, which means that this module can only be used with the mentioned config. which can be a bit more flexible either by removing the provider config or to support multiple versions for both terraform and provider.

Use this Directory structure for your current state:

.
├── latest_provider_terraform_files_directory
│   ├── providers.tf
│   └── resource_group.tf
├── modules
│   └── resource_group.tf
└── old_provider_terraform_files_directory
    ├── providers.tf
    └── resource_group.tf

Detailed directory structure:

.
├── latest_provider_terraform_files_directory
│   ├── .terraform
│   │   ├── modules
│   │   │   └── modules.json
│   │   └── providers
│   │       └── registry.terraform.io
│   │           └── hashicorp
│   │               └── azurerm
│   │                   └── 3.32.0
│   │                       └── darwin_amd64
│   │                           └── terraform-provider-azurerm_v3.32.0_x5
│   ├── .terraform.lock.hcl
│   ├── providers.tf
│   └── resource_group.tf
├── modules
│   └── resource_group.tf
└── old_provider_terraform_files_directory
    ├── .terraform
    │   ├── modules
    │   │   └── modules.json
    │   └── providers
    │       └── registry.terraform.io
    │           └── hashicorp
    │               └── azurerm
    │                   └── 3.0.2
    │                       └── darwin_amd64
    │                           └── terraform-provider-azurerm_v3.0.2_x5
    ├── .terraform.lock.hcl
    ├── providers.tf
    └── resource_group.tf