To better understand your situation, could you clarify whether this domain is the primary domain or a subdomain within your tenant?
Case 1: This domain is a subdomain
-Go to Exchange admin center https://admin.cloud.microsoft/exchange#/homepage> Mail flow > Accepted Domain > Choose Domain > Select Internal Relay and tick "Accept mail for all subdomains" then try to send emails.
Case 2: This domain is primary domain
- If a subdomain already exists: Try sending email using the subdomain (make sure DKIM and DMARC are set up successful for the subdomain) to see if the email can be sent successfully. If not, check whether you receive a similar error.
- If no subdomain exists yet: Try creating a custom domain following this guide: Add your custom domain - Microsoft Entra | Microsoft > Then use that subdomain to send email and test whether it works. Then, Go to Exchange admin center > Mail flow > Accepted Domain > Choose Domain > Select Internal Relay and tick "Accept mail for all subdomains" >Then, try sending an email again.
I'm looking forward to your update!
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