Virtual machine OS or data disk is not encrypted with customer-managed key Affecting Compute service in Azure

Set the diskEncryptionSetId attribute in Microsoft.Compute/disks to the ID of a disk encryption set.

Example configuration:

{
    "$schema": "https://schema.management.azure.com/schemas/2019-04-01/deploymentTemplate.json#",
    "contentVersion": "1.0.0.0",
    "resources": [
        {
            "type": "Microsoft.Compute/disks",
            "apiVersion": "2022-07-02",
            "name": "example-allowed",
            "location": "[resourceGroup().location]",
            "dependsOn": [
                "[resourceId('Microsoft.Compute/diskEncryptionSets', 'example-des-696')]",
                "[resourceId('Microsoft.KeyVault/vaults/accessPolicies', 'example-keyvault696', 'add')]"
            ],
            "sku": {
                "name": "Standard_LRS"
            },
            "properties": {
                "creationData": {
                    "createOption": "Empty"
                },
                "diskSizeGB": 1,
                "encryption": {
                    "diskEncryptionSetId": "[resourceId('Microsoft.Compute/diskEncryptionSets', 'example-des-696')]"
                }
            }
        }
    ]
}

Set the disk_encryption_set_id attribute to the ID of a disk encryption set.

Example configuration:

resource "azurerm_managed_disk" "allowed" {
  name                   = "md696"
  resource_group_name    = azurerm_resource_group.example696.name
  location               = azurerm_resource_group.example696.location
  storage_account_type   = "Standard_LRS"
  create_option          = "Empty"
  disk_size_gb           = "1"
  disk_encryption_set_id = azurerm_disk_encryption_set.example696.id

  depends_on = [
    "azurerm_key_vault_access_policy.example696"
  ]
}