diff --git a/src/azure-cli/azure/cli/command_modules/vm/custom.py b/src/azure-cli/azure/cli/command_modules/vm/custom.py
index abd2a5ee5e4..02a23b89ad8 100644
--- a/src/azure-cli/azure/cli/command_modules/vm/custom.py
+++ b/src/azure-cli/azure/cli/command_modules/vm/custom.py
@@ -26,6 +26,7 @@
 
 from knack.log import get_logger
 from knack.util import CLIError
+from azure.cli.core.azclierror import CLIInternalError
 
 from azure.cli.command_modules.vm._validators import _get_resource_group_from_vault_name
 from azure.cli.core.commands.validators import validate_file_or_dict
@@ -670,6 +671,10 @@ def setter(vm, external_identities=external_identities):
         vm.identity = VirtualMachineIdentity(type=identity_types)
         if external_identities:
             vm.identity.user_assigned_identities = {}
+            if not cmd.supported_api_version(min_api='2018-06-01', resource_type=ResourceType.MGMT_COMPUTE):
+                raise CLIInternalError("Usage error: user assigned identity is not available under current profile.",
+                                       "You can set the cloud's profile to latest with 'az cloud set --profile latest"
+                                       " --name <cloud name>'")
             for identity in external_identities:
                 vm.identity.user_assigned_identities[identity] = UserAssignedIdentitiesValue()