diff --git a/bundle/deploy/terraform/init.go b/bundle/deploy/terraform/init.go
index e7f720d0..7d75ee8a 100644
--- a/bundle/deploy/terraform/init.go
+++ b/bundle/deploy/terraform/init.go
@@ -111,6 +111,13 @@ func inheritEnvVars(ctx context.Context, environ map[string]string) error {
 		environ["PATH"] = path
 	}
 
+	// Include $AZURE_CONFIG_FILE in set of environment variables to pass along.
+	// This is set in Azure DevOps by the AzureCLI@2 task.
+	azureConfigFile, ok := env.Lookup(ctx, "AZURE_CONFIG_FILE")
+	if ok {
+		environ["AZURE_CONFIG_FILE"] = azureConfigFile
+	}
+
 	// Include $TF_CLI_CONFIG_FILE to override terraform provider in development.
 	// See: https://developer.hashicorp.com/terraform/cli/config/config-file#explicit-installation-method-configuration
 	devConfigFile, ok := env.Lookup(ctx, "TF_CLI_CONFIG_FILE")
diff --git a/bundle/deploy/terraform/init_test.go b/bundle/deploy/terraform/init_test.go
index 94e47dbc..450e7eb6 100644
--- a/bundle/deploy/terraform/init_test.go
+++ b/bundle/deploy/terraform/init_test.go
@@ -269,19 +269,20 @@ func TestSetUserAgentExtraEnvVar(t *testing.T) {
 }
 
 func TestInheritEnvVars(t *testing.T) {
-	env := map[string]string{}
-
 	t.Setenv("HOME", "/home/testuser")
 	t.Setenv("PATH", "/foo:/bar")
 	t.Setenv("TF_CLI_CONFIG_FILE", "/tmp/config.tfrc")
+	t.Setenv("AZURE_CONFIG_FILE", "/tmp/foo/bar")
 
-	err := inheritEnvVars(context.Background(), env)
-
-	require.NoError(t, err)
-
-	require.Equal(t, env["HOME"], "/home/testuser")
-	require.Equal(t, env["PATH"], "/foo:/bar")
-	require.Equal(t, env["TF_CLI_CONFIG_FILE"], "/tmp/config.tfrc")
+	ctx := context.Background()
+	env := map[string]string{}
+	err := inheritEnvVars(ctx, env)
+	if assert.NoError(t, err) {
+		assert.Equal(t, "/home/testuser", env["HOME"])
+		assert.Equal(t, "/foo:/bar", env["PATH"])
+		assert.Equal(t, "/tmp/config.tfrc", env["TF_CLI_CONFIG_FILE"])
+		assert.Equal(t, "/tmp/foo/bar", env["AZURE_CONFIG_FILE"])
+	}
 }
 
 func TestSetUserProfileFromInheritEnvVars(t *testing.T) {