Thank you for posting this in Microsoft Q&A.
As I understand you want the steps to move from ADFS to Cloud Authentication. Also, you have password hash sync configured in your environment.
With PHS configured in your environment, user's password gets synced to Azure AD. Currently when you have ADFS configured in your environment, user Authentication is handled by on-premises ADFS servers.
For testing before moving to cloud authentication, you can make use of "Staged rollout" feature in Azure AD to confirm if cloud authentication is working as expected.
This method is used to have Zero impact in your environment while migration.
Staged Rollout allows you to selectively test groups of users with cloud authentication capabilities like Microsoft Entra multifactor authentication, Conditional Access, Identity Protection for leaked credentials, Identity Governance, and others, before cutting over your domains.
You can refer to below article to configure staged rollout in your environment,
https://learn.microsoft.com/en-us/entra/identity/hybrid/connect/how-to-connect-staged-rollout
Once you make sure that cloud authentication is working fine using staged rollout, you can un-federate the domain in ADFS environment. Once you un-federate the domain, Azure AD will stop redirecting the authentication requests to ADFS.
Sync user passwords are already synced to Azure AD, Azure will handle the authentication and give access to requested resources.
Now, post all testing and un-federating the domain, you can decommission ADFS servers.
Let me know if you have any further questions.
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