Hi @SaiPotharaju,
Like DENNISSCHNELL said, you could follow the following steps to free up space in SharePoint online.
1.Empty the recycle bin.
Site Settings > Site Collection Administration > Recycle bin > Empty recycle bin
2.Decrease the number of file versions in Version settings.
Library settings > Versioning settings > modify "Keep the following number of major versions" and "Keep drafts for the following number of major versions" value
3.Delete previous versions of files.
Site Settings > Site Collection Administration > Storage Metrics > click library > Version History > Version History or Delete Draft Versions
And you could try to Add storage space for your subscription.
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