License & Subscription Issues

How to Reassign a OneDrive for Business Plan 2 License

Maira Mehtab Sep 22, 2026 869 views

Question details

The user needs to correctly transfer a OneDrive for Business Plan 2 license to a different user and ensure the associated cloud storage increase is applied.

Product: OneDrive for Business / Microsoft 365
Device & OS: not provided
Scenario: Managing user licenses and expanding cloud storage quotas within the Microsoft 365 admin center.
Observed behavior: The license cannot be transferred directly between users, and even when it appears successfully assigned, the expected storage limit increase does not immediately reflect on the new account.

Before you start

Ensure you are logged into the Microsoft 365 admin center with Global Administrator or User Administrator privileges before attempting to manage user licenses.

Solution 1Recommended

Unassign and Reassign the License via Microsoft 365 Admin Center

Properly unassign the license from the current user before allocating it to the new user to prevent conflict.

Microsoft 365 requires a license to be completely removed from the original user before it becomes available for reassignment. Additionally, backend sync processes mean that storage quota updates are not always instantaneous.

Access the Admin Center

Unassign the Original License

Navigate to 'Users' > 'Active users' and select the original user. Go to the 'Licenses and apps' tab, uncheck the OneDrive for Business Plan 2 license, and save the changes.

Assign to the New User

Select the new user from the Active users list, open their 'Licenses and apps' tab, check the newly freed OneDrive for Business Plan 2 license, and save.

Propagation Delay: Please allow up to 24 hours for the new license status and storage limits to fully reflect in the user's OneDrive account.

Solution 2

Contact Microsoft Support for Tenant Configuration Issues

If the assignment saves but the storage limit does not increase after 24 hours, backend intervention may be necessary.

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Frequently Asked Questions

Why hasn't my OneDrive storage increased after assigning a Plan 2 license?

License and storage changes in Microsoft 365 can take up to 24 hours to fully propagate across the backend system. If it has been more than 24 hours, you may need to contact Microsoft Support to check your tenant configuration.

Can I transfer a OneDrive license directly without unassigning it first?

No, you must first remove the OneDrive for Business Plan 2 license from the original user's account in the Microsoft 365 admin center before it becomes available to be assigned to a new user.

Do I lose my files when a OneDrive license is unassigned?

When a license is removed, the user loses access to OneDrive, and the data will eventually be deleted according to your organization's retention policies. Always back up or transfer important files before removing a license.

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