You have an Azure virtual machine named VM1 and an Azure key vault named Vault1.

To prepare Vault1 for Azure Disk Encryption, you need to perform the following actions on Vault1:

Create a new key. A key encryption key (KEK) is an encryption key that is used to encrypt the encryption secrets before they are stored in the key vault. You can create a new KEK by using the Azure CLI, the Azure PowerShell, or the Azure portal1. You can also import an existing KEK from another source, such as a hardware security module (HSM)2. The KEK must be a 2048-bit RSA key or a 256-bit AES key3.

Select Azure Disk Encryption for volume encryption. This is an advanced access policy setting that enables Azure Disk Encryption to access the keys and secrets in the key vault. You can select this setting by using the Azure CLI, the Azure PowerShell, or the Azure portal4. You must also enable access to Microsoft Trusted Services if you have enabled the firewall on the key vault.