Hi Hrishi,
Its possible. But there are few considerations.
Straight forward approach is to follow the traditional way. Extend your existing on-premises Active Directory infrastructure to Azure, by deploying a VM in Azure that runs AD DS as a Domain Controller with VPN connectivity and decommissioned the on-prem. you can get the Azure AD connected installed in new DC with staging mode.
- Azure ADDS only talks with Azure AD. There is no direct relationship with on-prem AD from Azure ADDS (until you create some forest trusts). Azure AD DS replicates identity information from Azure AD, so it works with Azure AD tenants that are cloud-only, or synchronized with an on-premises AD DS environment.
- So deploy Azure ADDS and sync with Azure AD and then decommission the on-prem AD and make synced users cloud only , then readd the domain joined machines to azure adds domain. - this step needs through planning and execution .
- Note : Azure ADDS is not same as your traditional AD. there are limitations and the way it operates is different since its a Microsoft managed domain.
https://learn.microsoft.com/en-us/azure/active-directory-domain-services/faqs