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To address the issue, the customer downloaded the PostgreSQL appliance components from the official source (https://aka.ms/latestapplianceservices), installed the PostgreSQL Agent, and completed the required configuration.
However, despite successful setup, the appliance was still unable to establish communication with the agent.
As a resolution step, the customer removed the existing appliance and deployed a new one. After the fresh deployment, the issue was resolved — PostgreSQL credentials could be added successfully out of the box without any further errors.
The customer has confirmed this behavior and shared a screenshot for validation.
Azure Migrate had the bottleneck, special thanks to Andre Matos for this troubleshooting approach.
Kindly & up-vote this can be beneficial to other community members.