@Saad Farooq, Thanks for posting in Q&A. Based on my researching, Yes, we can configure Delivery Optimization settings via Intune to route devices to the Local Cache Server instead of getting Windows updates from the internet.
https://learn.microsoft.com/en-us/mem/intune/configuration/delivery-optimization-settings
To do this, you can create an Intune Delivery Optimization profile
https://learn.microsoft.com/en-us/mem/intune/configuration/delivery-optimization-settings
You can also configure the following settings to optimize Delivery Optimization for your environment:
- Restrict peer selection to computers on the same subnet by setting the "Restrict peer selection – Subnet" option.
- Configure Group IDs to restrict Delivery Optimization clients to only share content with devices in the same group.
Hope the above information can help.
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