if you want to control VM login credentials also with Azure permissions, Ten you need to use Azure AD login Eztension for VMS.
Once this extension is installed on that vm, Then you can Assign admin or non admin permission for that user, Then the user can login to the VM using AD credentials.
Reference is here.
Please note that this extension is in preview now. Using this in production systems is not recommended.
If you are not planning to use this extension, Then you need to create a username and assign a password for that vm and share them with the users. We cant control the login of those vms using azure roles.