Let’s say we need to delete our production environment which we set up at the start for testing purpose and now we want to start from scratch.
Admin centre will not allow to delete production environment to be deleted, unless we change it’s type to Sandbox first.
As you can see no option to delete Production instance.
Click on Edit and go to following page
On this page we can change type from Production to Sanbox. We can also change URL if needed
Once saved, wait for couple of minutes and come back to Dynamics 365 Administration Centre page where we will see that our instance has moved to Sandbox and we can delete this.
Delete and job done.