@Harsha Parasa Thank you for reaching out to us, if i understand correctly you want to migrate users (.local) to Entra ID.
Migrating a .local domain to Entra ID is not recommended as it is not a routable domain name and can cause issues with authentication and other services. It's recommended to use a publicly routable domain name for your Entra ID tenant.
If you still want to proceed with the migration, you will need to first register a publicly routable domain name and add it to your Entra ID tenant. Once you have done that, you can start the migration process by configuring your on-premises Active Directory to use the new domain name and synchronizing the directory with Entra ID using Entra ID Connect.
During the migration process, you will need to update all the applications and services that rely on the .local domain name to use the new domain name. so it's important to plan and test the migration thoroughly before making any changes in production.
Same has been documented here - https://learn.microsoft.com/en-us/microsoft-365/enterprise/prepare-a-non-routable-domain-for-directory-synchronization?view=o365-worldwide#:~:text=Prepare%20a%20nonroutable%20domain%20for%20directory%20synchronization which might help you to understand the scenario in detailed.
Let me know if you have any further questions, feel free to post back.
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