How to Defederate Microsoft 365 from GoDaddy: Complete T-Minus 365 Guide

Published 2026-03-26 by TechNet New England

Customers can purchase a Microsoft 365 subscription direct with GoDaddy along with their primary domain. When this occurs, GoDaddy federates this domain and tenant, making it unable to transfer under the CSP program or Direct to Microsoft. Moving and defederating this account has been a major pain point and area of confusion which this guide addresses.

This guide is based on the excellent work by T-Minus 365.

What You Can Achieve With This Guide

• Defederate the tenant without migrating to a new tenant
• Never have to call GoDaddy
• Keep user accounts vs deleting them
• Have no mail flow downtime

High-Level Steps Overview

1. A. Prepare your End Users
2. B. Become a Tenant Admin in GoDaddy
3. C. Remove Federation with GoDaddy
4. D. Reset Users Passwords
5. E. Add a CSP Provider or Move Direct to Microsoft
6. F. Provision Licensing into the Account
7. G. Remove GoDaddy as Delegated Admin
8. H. Cancel GoDaddy Subscription

A. Prepare Your End Users

Defederating requires users to reset their passwords in order to be able to login to their account. You will need to have a password list to distribute to them or have them provide you passwords beforehand. You could just reset them all to a temporary password after federation and then they can change to whatever they want after.

Define a date and time in which you will be defederating. We recommend during non-business hours even though there is no downtime in mail flow with this solution. Provide end users with this information.

Since users may run into activation prompts within their Office apps and Outlook during the license transition, provide them documentation for how to sign back in after the license switch has taken place. For Office apps they can simply go to File > Account > Sign Out > Sign In.

In Outlook, users will be prompted to re-enter their new password after it's changed.

B. Become a Tenant Admin in GoDaddy

When a user sets up a 365 account directly with GoDaddy, they set up the initial user as an "admin" user but this user is redirected to the GoDaddy portal when trying to access the admin tab at Office.com. For this reason, we need to gain access to the true Global Admin so that we can perform the necessary PowerShell scripts to defederate the tenant.

1. Login to portal.azure.com with the admin user that was set up when the account was first created
2. Click on the 3 lines (hamburger menu) in the top left corner
3. Click on Azure Active Directory, then click on Users
4. Look for a user labeled admin@yourdomain.onmicrosoft.com
5. Click on this user and reset their password
6. Copy the temporary password, then open an incognito window
7. Go to office.com and sign in with that username and temporary password
8. Establish a new password

With this completed, you now have a user that can run the necessary PowerShell commands in the future steps.

C. Remove Federation with GoDaddy

Write-Host "Checking for MSGraph module..."

$Module = Get-Module -Name "Microsoft.Graph.Identity.DirectoryManagement" -ListAvailable

if ($Module -eq $null) {
    Write-Host "MSGraph module not found, installing MSGraph"
    Install-Module -name Microsoft.Graph.Identity.DirectoryManagement
}

Connect-MgGraph -Scopes "Directory.Read.All","Domain.Read.All","Domain.ReadWrite.All","Directory.AccessAsUser.All"
# Enter the Admin credentials from "Become a tenant Admin in GoDaddy"

Get-MgDomain
# See that the domain is "federated"

Update-MgDomain -DomainId "yourdomain.com" -Authentication Managed

Important: Replace "yourdomain.com" with your actual federated domain. After this is complete you will get a new command line. You can run Get-MgDomain again and see that your domain is now "managed".

Note: ALL domains in the tenant need to be in a managed state for this to work correctly, even if one is no longer in use.

Supporting Documentation

• Get Started with Microsoft Graph PowerShell SDK
• Get-MgDomain Documentation
• Update-MgDomain Documentation

D. Reset Users Passwords

You can do this manually one user at a time if there aren't many users in the account. Login to office.com as the admin from section B - now that the tenant is defederated, you will be able to click into the admin tile and access the Users section.

For bulk password resets, use this PowerShell script:

Write-Host "Checking for MSGraph module..."

$Module = Get-Module -Name "Microsoft.Graph.Users.Actions" -ListAvailable

if ($Module -eq $null) {
    Write-Host "MSGraph module not found, installing MSGraph"
    Install-Module -name Microsoft.Graph.Users.Actions
}

Connect-MgGraph
# Enter the Admin credentials from "Become a tenant Admin in GoDaddy"

# Define CSV path of Users
$UserPath = Read-Host -Prompt "Enter File Path For CSV list of users"

# CSV should have headers: UserPrincipalName, Password
Import-Csv -Path $UserPath | ForEach-Object {
    Update-MgUserPassword -UserId $_.UserPrincipalName -NewPassword $_.Password
}

E. Add a New Provider and Provision Licensing

Now that the tenant is defederated, you can add a CSP provider with their delegated admin link or go direct to Microsoft.

For CSP (Cloud Solution Provider):

1. Paste the appropriate delegated admin link in a browser
2. Sign into the tenant with the Global Admin credentials
3. Accept the relationship
4. After the acceptance, reload the page and you will see a new CSP listed
5. Order licensing for this customer

If you are not changing the subscription, then all you would need to do is provision the same amount of seats as you have today, remove GoDaddy as delegated admin, and cancel with GoDaddy. There is no other action required - license ownership transfers and there will be no downtime for users.

If Changing Subscriptions (e.g., Business Standard to Business Premium):

1. Order the licensing from CSP
2. See the licensing provisioned under Billing > Your Products
3. Go to Users > Active Users and bulk assign the new licensing from CSP
4. Unassign the licensing from GoDaddy
5. Remove GoDaddy as Delegated Admin
6. Cancel the GoDaddy subscription

For Microsoft Direct:

1. In the Microsoft Admin Portal, go to Billing > Purchase Services
2. Purchase the licensing you want for your users
3. Follow the same steps to assign licenses if changing subscription types

F. Remove GoDaddy as Delegated Admin and Cancel Subscription

Remove GoDaddy Partner Access:

1. In the 365 Admin Portal, go to Settings > Partner Relationships
2. Click on GoDaddy
3. Remove their roles

Cancel GoDaddy Subscription:

1. Login to your GoDaddy account
2. Navigate to your Microsoft 365 subscription
3. Cancel the renewal

Conclusion

From here, the subscription from GoDaddy will expire at end of term and that is all. You now have a tenant under CSP or direct with Microsoft, with all of the typical management functionality you are familiar with.

Bonus: SharePoint URLs

After defederation, you may want to update the default SharePoint URLs to reflect the tenant domain. This can be done through the SharePoint admin center.

Need Help?

If this process seems overwhelming or you want expert assistance, TechNet New England offers professional GoDaddy defederation services. We handle everything from start to finish with zero data loss and minimal disruption to your business.