Hello Ajit,
Thank you for reaching out Q/A.
Yes. Azure Arc Private Link can be used to onboard VM instances running on Azure Local to Azure Arc, but with important design and support considerations.
Azure Local itself doesn’t “support Private Link” as a platform feature, but Azure Local VMs can consume Azure Arc Private Link when networking and DNS are designed correctly.
- The Azure Local network is connected to an Azure Virtual Network using Site-to-Site VPN or ExpressRoute (or has controlled outbound HTTPS access).
- A Private Endpoint is deployed in that Azure VNet and associated with the Arc Private Link Scope.
- DNS is configured so the Arc endpoints resolve to the private IP address of the Private Endpoint.
Reference:
Use Azure Private Link to securely connect servers to Azure Arc
Create an Azure Arc private link scope
Hope this helps! Please let me know if you have any queries in comments.