Requirement

Using Azure Cloud Shell account to SSH into an Azure VM is currently not supported:

We are working with MSAL and VM team to implement Single Click SSH in Azure Cloud Shell.

Workaround

As pointed out by #22057 (comment), a workaround is to run az login in Cloud Shell to replace the default Cloud Shell account with a user/service principal account. Then az ssh vm will work as expected.

References

• acquire_token_interactive(..., prompt="none") acquires token via Cloud Shell's IMDS-like interface AzureAD/microsoft-authentication-library-for-python#420
• A PoC of support SSH Cert inside Cloud Shell azure-cli-extensions#4641
• Error message: VM SSH currently doesn't support managed identity or Cloud Shell. #22057
• https://docs.microsoft.com/en-us/azure/active-directory/devices/howto-vm-sign-in-azure-ad-linux