diff --git a/azurerm/internal/services/msi/migration/user_assigned_identity_V0_to_V1.go b/azurerm/internal/services/msi/migration/user_assigned_identity_V0_to_V1.go
new file mode 100644
index 000000000000..fc0d375e878d
--- /dev/null
+++ b/azurerm/internal/services/msi/migration/user_assigned_identity_V0_to_V1.go
@@ -0,0 +1,62 @@
+package migration
+
+import (
+	"log"
+
+	"github.com/hashicorp/terraform-plugin-sdk/helper/validation"
+	"github.com/terraform-providers/terraform-provider-azurerm/azurerm/helpers/azure"
+	"github.com/terraform-providers/terraform-provider-azurerm/azurerm/internal/tags"
+
+	"github.com/hashicorp/terraform-plugin-sdk/helper/schema"
+	"github.com/terraform-providers/terraform-provider-azurerm/azurerm/internal/services/msi/parse"
+)
+
+func UserAssignedIdentityV0ToV1() schema.StateUpgrader {
+	return schema.StateUpgrader{
+		Version: 0,
+		Type:    userAssignedIdentityV0Schema().CoreConfigSchema().ImpliedType(),
+		Upgrade: userAssignedIdentityUpgradeV0ToV1,
+	}
+}
+
+func userAssignedIdentityV0Schema() *schema.Resource {
+	return &schema.Resource{
+		Schema: map[string]*schema.Schema{
+			"name": {
+				Type:         schema.TypeString,
+				Required:     true,
+				ForceNew:     true,
+				ValidateFunc: validation.StringLenBetween(3, 128),
+			},
+
+			"resource_group_name": azure.SchemaResourceGroupName(),
+
+			"location": azure.SchemaLocation(),
+
+			"tags": tags.Schema(),
+
+			"principal_id": {
+				Type:     schema.TypeString,
+				Computed: true,
+			},
+
+			"client_id": {
+				Type:     schema.TypeString,
+				Computed: true,
+			},
+		},
+	}
+}
+
+func userAssignedIdentityUpgradeV0ToV1(rawState map[string]interface{}, meta interface{}) (map[string]interface{}, error) {
+	oldId := rawState["id"].(string)
+	id, err := parse.UserAssignedIdentityID(oldId)
+	if err != nil {
+		return rawState, err
+	}
+
+	newId := id.ID()
+	log.Printf("Updating `id` from %q to %q", oldId, newId)
+	rawState["id"] = newId
+	return rawState, nil
+}
diff --git a/azurerm/internal/services/msi/user_assigned_identity_resource.go b/azurerm/internal/services/msi/user_assigned_identity_resource.go
index 1af599b03d97..69640472eb91 100644
--- a/azurerm/internal/services/msi/user_assigned_identity_resource.go
+++ b/azurerm/internal/services/msi/user_assigned_identity_resource.go
@@ -12,6 +12,7 @@ import (
 	"github.com/terraform-providers/terraform-provider-azurerm/azurerm/helpers/tf"
 	"github.com/terraform-providers/terraform-provider-azurerm/azurerm/internal/clients"
 	"github.com/terraform-providers/terraform-provider-azurerm/azurerm/internal/location"
+	"github.com/terraform-providers/terraform-provider-azurerm/azurerm/internal/services/msi/migration"
 	"github.com/terraform-providers/terraform-provider-azurerm/azurerm/internal/services/msi/parse"
 	"github.com/terraform-providers/terraform-provider-azurerm/azurerm/internal/tags"
 	azSchema "github.com/terraform-providers/terraform-provider-azurerm/azurerm/internal/tf/schema"
@@ -30,6 +31,11 @@ func resourceArmUserAssignedIdentity() *schema.Resource {
 			return err
 		}),
 
+		SchemaVersion: 1,
+		StateUpgraders: []schema.StateUpgrader{
+			migration.UserAssignedIdentityV0ToV1(),
+		},
+
 		Timeouts: &schema.ResourceTimeout{
 			Create: schema.DefaultTimeout(30 * time.Minute),
 			Read:   schema.DefaultTimeout(5 * time.Minute),