How to fix Windows server 2016 to 2019 Server Upgrade

Temilade Abbas

The Windows Setup engine is likely being blocked by a different storage anomaly. If you have any additional data disks attached to this Azure virtual machine that are offline, uninitialized, or completely full, setup will fail the aggregate space check. You should navigate to the virtual machine settings in the Azure Portal and temporarily detach all data disks, leaving only the primary OS disk connected, before attempting the upgrade again.

If detaching the secondary disks does not clear the error, the root cause is then likely a full System Reserved partition. This hidden partition stores vital boot configuration data, and the upgrade process requires a minimum of 15 to 50 megabytes of free space here to write the new boot environment. You can verify the capacity by opening Disk Management by typing diskmgmt.msc in the run dialog, right-clicking the System Reserved volume, and assigning it a temporary drive letter.

When this hidden partition runs out of space, it is typically clogged by hidden NTFS journal logs rather than actual user files. You can safely clear this background data by opening an administrative command prompt and executing the command fsutil usn deletejournal /N /D X: where the letter X represents the temporary drive letter you just assigned. Once the journal is deleted and adequate space is restored, remove the temporary drive letter in Disk Management and launch the Windows Server 2019 setup executable once more.

Hope this helps :)

VP

Hello @Temilade Abbas,

Follow the steps to fix the issue.

Azure marketplace images (especially older Server 2016 deployments) usually have:

System Reserved / EFI partition that is too small

Sometimes <100 MB, but Server 2019 needs ~500 MB+

During in-place upgrade setup: Windows tries to expand or stage boot files

Setup cannot resize the system partition

Setup incorrectly reports it as a disk space issue

This is Microsoft-documented behavior, not your configuration error.

Fix Option 1 (MOST RELIABLE): Expand the System / EFI Partition

Step 1: Identify the partition layout

Run Disk Management or:

YAMLdiskpartlist diskselect disk 0list partition``Show more lines

Look for:

System Reserved (BIOS/MBR)

EFI System Partition (ESP) (UEFI/GPT)

Typical problematic sizes:

100 MB

260 MB

Step 2: Back up the VM (IMPORTANT)

Before touching partitions:

Create an Azure VM Snapshot

Or backup the OS disk

This step is non‑optional.

Step 3: Increase EFI / System Reserved partition to ≥ 500 MB

You have two ways:

Option A: Use a partition tool (recommended)

Azure does not allow online resizing of EFI via Windows tools.

Use:

Azure Recovery VM

Or attach OS disk to another VM

Use tools like:

MiniTool Partition Wizard

GParted

DiskGenius

Resize order:

Shrink C:

Expand EFI / System Reserved

Reattach disk to original VM

If this answers your query, do click Accept Answer and Up-Vote for the same. And, if you have any further query do let us know.

Hi Temilade Abbas,

This specific error during an Azure Virtual Machine in-place upgrade frequently occurs because of how Windows Setup calculates available storage across attached disks. Even though your Disk Management interface clearly shows over 400 GB of free space on the primary partition, the setup engine gets confused by the system paging file. By default, Azure provisions a temporary ephemeral drive and places the pagefile.sys on it to optimize performance and save IOPS on the primary OS disk. When the upgrade wizard scans the environment, it cannot properly validate the space requirements across these distinct virtualized storage layouts and halts the installation with a generic warning.

To resolve this issue, you must temporarily relocate the paging file back to your primary OS drive. You can accomplish this by running sysdm.cpl from the command prompt or run dialog to open the System Properties. Navigate to the Advanced tab, open the Performance settings, and switch to the Virtual Memory section. You will need to uncheck the automatic management option, select the temporary Azure drive to configure it with no paging file, and then select your C: drive to be system managed. After applying these changes, a complete reboot of the virtual machine is required for the new memory configuration to take effect.

Once the server has restarted, you can launch the Windows Server 2019 setup wizard again and it will pass the storage validation checks seamlessly. Keep in mind that as the upgrade process initiates and reaches the reboot phase, your remote desktop connection will inevitably disconnect. You can continuously monitor the background installation progress and ensure the system does not hang by utilizing the Boot diagnostics screenshot feature directly within the virtual machine blade in the Azure portal.

Hope this answer brought you some useful information. If it did, please hit “accept answer”. Should you have any questions, feel free to leave a comment.

VP

The message appears during an in‑place upgrade when setup can’t correctly validate disk space, even though the OS disk has plenty of free space. For Azure VMs, fix and complete the upgrade by following the supported in‑place upgrade flow and prerequisites rather than rerunning setup interactively.

Use these steps:

1. Verify prerequisites
   • Confirm that Windows Server 2016 → 2019 is a supported path in the Windows Server upgrade matrix.
   • Ensure the OS disk meets the minimum space requirement (32 GB). The screenshot shows >400 GB free, which is sufficient.
   • Temporarily disable antivirus/anti‑spyware and host firewalls, as they can interfere with setup.
   • Run the Azure VM Windows OS Upgrade Assessment Tool to validate the upgrade path and detect known blocking issues.
2. Make sure the VM and upgrade media are prepared
   • VM must be in Running state.
   • Attach the Windows Server 2019 setup ISO/upgrade disk to the VM as a data disk.
   • In the guest OS, note the drive letter of the attached setup disk (for example, E: or F:).
3. Start the upgrade from PowerShell instead of the GUI
   • Sign in via RDP to the VM.
   • Open Windows PowerShell.
   • Change directory to the root of the setup disk, for example:

          Set-Location E:\
     

   • Run setup with the recommended switches so it runs unattended and bypasses some interactive checks:

          .\setup.exe /auto upgrade /dynamicupdate disable /eula accept
     

   • When prompted in the setup workflow, choose Keep personal files and apps.
4. Monitor the upgrade
   • The RDP session will disconnect while the OS is upgrading.
   • Use Azure Boot diagnostics screenshots in the portal to monitor progress until the VM returns to the logon screen.
5. Post‑upgrade actions
   • Log on and verify system functionality and that Windows Server 2019 is installed.
   • Re‑enable antivirus, firewalls, Azure Backup, and any monitoring agents that were paused.

If setup still fails after running from PowerShell and validating with the OS Upgrade Assessment Tool, review CBS.log and other logs for specific error codes and follow the guidance in the Windows Update/OS upgrade troubleshooting articles, which may again recommend an in‑place upgrade using the same media.

References:

• In-place upgrade for VMs running Windows Server in Azure
• Troubleshoot Windows Update errors that require in-place upgrades for Azure VMs
• Troubleshoot Windows OS upgrade issues