diff --git a/infrastructure/commons/cert_manager/locals.tf b/infrastructure/commons/cert_manager/locals.tf
index 5a4ad10b..8fcbd0c8 100644
--- a/infrastructure/commons/cert_manager/locals.tf
+++ b/infrastructure/commons/cert_manager/locals.tf
@@ -19,12 +19,14 @@ locals {
     } : {},
 
     var.cloud_provider == "azure" ? {
-      enabled             = true
-      subscription_id     = var.azure_subscription_id
-      resource_group_name = var.azure_resource_group_name
-      client_id           = var.azure_client_id
-      tenant_id           = var.azure_tenant_id
-      hosted_zone_name    = var.azure_hosted_zone_name
+      enabled               = true
+      subscription_id       = var.azure_subscription_id
+      resource_group_name   = var.azure_resource_group_name
+      client_id             = var.azure_client_id
+      client_secret         = var.azure_client_secret
+      tenant_id             = var.azure_tenant_id
+      hosted_zone_name      = var.azure_hosted_zone_name
+      use_workload_identity = var.azure_workload_identity_enabled
     } : {},
 
     var.cloud_provider == "aws" ? {
@@ -67,9 +69,9 @@ locals {
       "eks.amazonaws.com/role-arn" = var.aws_sa_arn
     }
 
-    azure = {
+    azure = var.azure_workload_identity_enabled ? {
       "azure.workload.identity/client-id" = var.azure_client_id
-    }
+    } : {}
 
     oci = {
       "oci.oraclecloud.com/workload-identity-principal" = var.oci_sa_ocid
@@ -87,7 +89,7 @@ locals {
         lookup(local.annotations_by_provider, var.cloud_provider, {})
       )
     }
-    podLabels = var.cloud_provider == "azure" ? {
+    podLabels = var.cloud_provider == "azure" && var.azure_workload_identity_enabled ? {
       "azure.workload.identity/use" = "true"
     } : {}
     dns01RecursiveNameservers     = "8.8.8.8:53,1.1.1.1:53"
diff --git a/infrastructure/commons/cert_manager/templates/cert_manager_azure_values.tmpl.yaml b/infrastructure/commons/cert_manager/templates/cert_manager_azure_values.tmpl.yaml
index 9cd81552..6ee80671 100644
--- a/infrastructure/commons/cert_manager/templates/cert_manager_azure_values.tmpl.yaml
+++ b/infrastructure/commons/cert_manager/templates/cert_manager_azure_values.tmpl.yaml
@@ -1,7 +1,11 @@
 azure:
   subscriptionID: "${subscription_id}"
   resourceGroupName: "${resource_group_name}"
-  clientID: "${client_id}"
   tenantID: "${tenant_id}"
   hostedZoneName: "${hosted_zone_name}"
+  clientID: "${client_id}"
+%{ if use_workload_identity ~}
   useWorkloadIdentity: true
+%{ else ~}
+  clientSecret: "${client_secret}"
+%{ endif ~}
diff --git a/infrastructure/commons/cert_manager/tests/cert_manager_azure.tftest.hcl b/infrastructure/commons/cert_manager/tests/cert_manager_azure.tftest.hcl
index d59de64d..595e2f0c 100644
--- a/infrastructure/commons/cert_manager/tests/cert_manager_azure.tftest.hcl
+++ b/infrastructure/commons/cert_manager/tests/cert_manager_azure.tftest.hcl
@@ -5,11 +5,12 @@ variables {
   hosted_zone_name          = "myorg.nullimplementation.com"
   account_slug              = "myorg"
   private_domain_name       = "myorg.nullimplementation.com"
-  azure_client_id           = "aaaaaaaa-bbbb-cccc-dddd-eeeeeeeeeeee"
-  azure_subscription_id     = "00000000-0000-0000-0000-000000000000"
-  azure_resource_group_name = "rg-test"
-  azure_tenant_id           = "11111111-2222-3333-4444-555555555555"
-  azure_hosted_zone_name    = "myorg.nullimplementation.com"
+  azure_client_id               = "aaaaaaaa-bbbb-cccc-dddd-eeeeeeeeeeee"
+  azure_federated_credential_id = "/subscriptions/00000000/resourceGroups/rg-test/providers/Microsoft.ManagedIdentity/userAssignedIdentities/cert-manager/federatedIdentityCredentials/cert-manager-federated"
+  azure_subscription_id         = "00000000-0000-0000-0000-000000000000"
+  azure_resource_group_name     = "rg-test"
+  azure_tenant_id               = "11111111-2222-3333-4444-555555555555"
+  azure_hosted_zone_name        = "myorg.nullimplementation.com"
 }
 
 # Validates Azure provider config plans successfully
diff --git a/infrastructure/commons/cert_manager/tests/cert_manager_cross_provider.tftest.hcl b/infrastructure/commons/cert_manager/tests/cert_manager_cross_provider.tftest.hcl
index 452ab66e..e34b0ae7 100644
--- a/infrastructure/commons/cert_manager/tests/cert_manager_cross_provider.tftest.hcl
+++ b/infrastructure/commons/cert_manager/tests/cert_manager_cross_provider.tftest.hcl
@@ -23,11 +23,12 @@ run "gcp_vars_not_required_for_azure" {
     hosted_zone_name          = "myorg.example.com"
     account_slug              = "myorg"
     private_domain_name       = "myorg.example.com"
-    azure_client_id           = "aaaaaaaa-bbbb-cccc-dddd-eeeeeeeeeeee"
-    azure_subscription_id     = "00000000-0000-0000-0000-000000000000"
-    azure_resource_group_name = "rg-test"
-    azure_tenant_id           = "11111111-2222-3333-4444-555555555555"
-    azure_hosted_zone_name    = "myorg.example.com"
+    azure_client_id               = "aaaaaaaa-bbbb-cccc-dddd-eeeeeeeeeeee"
+    azure_federated_credential_id = "/subscriptions/00000000/resourceGroups/rg-test/providers/Microsoft.ManagedIdentity/userAssignedIdentities/cert-manager/federatedIdentityCredentials/cert-manager-federated"
+    azure_subscription_id         = "00000000-0000-0000-0000-000000000000"
+    azure_resource_group_name     = "rg-test"
+    azure_tenant_id               = "11111111-2222-3333-4444-555555555555"
+    azure_hosted_zone_name        = "myorg.example.com"
     # gcp_sa_email and project_id intentionally left empty
   }
 
@@ -126,11 +127,12 @@ run "oci_webhook_not_deployed_for_azure" {
     hosted_zone_name          = "myorg.example.com"
     account_slug              = "myorg"
     private_domain_name       = "myorg.example.com"
-    azure_client_id           = "aaaaaaaa-bbbb-cccc-dddd-eeeeeeeeeeee"
-    azure_subscription_id     = "00000000-0000-0000-0000-000000000000"
-    azure_resource_group_name = "rg-test"
-    azure_tenant_id           = "11111111-2222-3333-4444-555555555555"
-    azure_hosted_zone_name    = "myorg.example.com"
+    azure_client_id               = "aaaaaaaa-bbbb-cccc-dddd-eeeeeeeeeeee"
+    azure_federated_credential_id = "/subscriptions/00000000/resourceGroups/rg-test/providers/Microsoft.ManagedIdentity/userAssignedIdentities/cert-manager/federatedIdentityCredentials/cert-manager-federated"
+    azure_subscription_id         = "00000000-0000-0000-0000-000000000000"
+    azure_resource_group_name     = "rg-test"
+    azure_tenant_id               = "11111111-2222-3333-4444-555555555555"
+    azure_hosted_zone_name        = "myorg.example.com"
   }
 
   assert {
diff --git a/infrastructure/commons/cert_manager/validation.tf b/infrastructure/commons/cert_manager/validation.tf
index ed657ff9..a17eebfe 100644
--- a/infrastructure/commons/cert_manager/validation.tf
+++ b/infrastructure/commons/cert_manager/validation.tf
@@ -20,6 +20,14 @@ resource "terraform_data" "provider_validation" {
       condition     = var.cloud_provider != "azure" || length(var.azure_client_id) > 0
       error_message = "azure_client_id is required when cloud_provider is 'azure'."
     }
+    precondition {
+      condition     = var.cloud_provider != "azure" || !var.azure_workload_identity_enabled || length(var.azure_federated_credential_id) > 0
+      error_message = "azure_federated_credential_id is required when cloud_provider is 'azure' and azure_workload_identity_enabled is true. Use module.iam to create the federated identity credential and pass its id output."
+    }
+    precondition {
+      condition     = var.cloud_provider != "azure" || var.azure_workload_identity_enabled || length(var.azure_client_secret) > 0
+      error_message = "azure_client_secret is required when cloud_provider is 'azure' and azure_workload_identity_enabled is false."
+    }
     precondition {
       condition     = var.cloud_provider != "azure" || length(var.azure_subscription_id) > 0
       error_message = "azure_subscription_id is required when cloud_provider is 'azure'."
diff --git a/infrastructure/commons/cert_manager/variables.tf b/infrastructure/commons/cert_manager/variables.tf
index 4cb92446..fa185408 100644
--- a/infrastructure/commons/cert_manager/variables.tf
+++ b/infrastructure/commons/cert_manager/variables.tf
@@ -34,6 +34,24 @@ variable "azure_client_id" {
   default     = ""
 }
 
+variable "azure_workload_identity_enabled" {
+  description = "Enable Workload Identity for Azure DNS solver. When false, Service Principal auth is used and azure_client_secret is required."
+  type        = bool
+  default     = true
+}
+
+variable "azure_federated_credential_id" {
+  description = "Resource ID of the Azure federated identity credential for cert-manager (required when cloud_provider is 'azure' and azure_workload_identity_enabled is true). Pass module.iam_cert_manager.id to enforce dependency ordering."
+  type        = string
+  default     = ""
+}
+
+variable "azure_client_secret" {
+  description = "Azure AD client secret for Service Principal auth (required when cloud_provider is 'azure' and azure_workload_identity_enabled is false)."
+  type        = string
+  sensitive   = true
+  default     = ""
+}
 
 variable "private_domain_name" {
   description = "The private domain name for internal certificate issuance"
diff --git a/infrastructure/commons/external_dns/locals.tf b/infrastructure/commons/external_dns/locals.tf
index f646eab4..3081d79b 100644
--- a/infrastructure/commons/external_dns/locals.tf
+++ b/infrastructure/commons/external_dns/locals.tf
@@ -92,13 +92,13 @@ locals {
     provider = { name = "azure" }
     serviceAccount = {
       create = true
-      annotations = {
+      annotations = var.azure_workload_identity_enabled ? {
         "azure.workload.identity/client-id" = var.azure_client_id
-      }
+      } : {}
     }
-    podLabels = {
+    podLabels = var.azure_workload_identity_enabled ? {
       "azure.workload.identity/use" = "true"
-    }
+    } : {}
     extraVolumes = [
       {
         name = "azure-config"
diff --git a/infrastructure/commons/external_dns/secret.tf b/infrastructure/commons/external_dns/secret.tf
index 7f1a4d64..934437e3 100644
--- a/infrastructure/commons/external_dns/secret.tf
+++ b/infrastructure/commons/external_dns/secret.tf
@@ -19,12 +19,18 @@ resource "kubernetes_secret_v1" "external_dns_azure_config" {
   }
 
   data = {
-    "azure.json" = jsonencode({
-      tenantId                     = var.azure_tenant_id
-      subscriptionId               = var.azure_subscription_id
-      resourceGroup                = var.azure_resource_group
-      useWorkloadIdentityExtension = true
-    })
+    "azure.json" = jsonencode(merge(
+      {
+        tenantId                     = var.azure_tenant_id
+        subscriptionId               = var.azure_subscription_id
+        resourceGroup                = var.azure_resource_group
+        useWorkloadIdentityExtension = var.azure_workload_identity_enabled
+      },
+      var.azure_workload_identity_enabled ? {} : {
+        clientId     = var.azure_client_id
+        clientSecret = var.azure_client_secret
+      }
+    ))
   }
 
   depends_on = [kubernetes_namespace_v1.external_dns]
diff --git a/infrastructure/commons/external_dns/validation.tf b/infrastructure/commons/external_dns/validation.tf
index 6b531498..d34cf990 100644
--- a/infrastructure/commons/external_dns/validation.tf
+++ b/infrastructure/commons/external_dns/validation.tf
@@ -32,6 +32,14 @@ resource "terraform_data" "provider_validation" {
       condition     = var.dns_provider_name != "azure" || length(var.azure_client_id) > 0
       error_message = "azure_client_id is required when dns_provider_name is 'azure'."
     }
+    precondition {
+      condition     = var.dns_provider_name != "azure" || !var.azure_workload_identity_enabled || length(var.azure_federated_credential_id) > 0
+      error_message = "azure_federated_credential_id is required when dns_provider_name is 'azure' and azure_workload_identity_enabled is true. Use module.iam to create the federated identity credential and pass its id output."
+    }
+    precondition {
+      condition     = var.dns_provider_name != "azure" || var.azure_workload_identity_enabled || length(var.azure_client_secret) > 0
+      error_message = "azure_client_secret is required when dns_provider_name is 'azure' and azure_workload_identity_enabled is false."
+    }
     precondition {
       condition     = var.dns_provider_name != "azure" || length(var.azure_subscription_id) > 0
       error_message = "azure_subscription_id is required when dns_provider_name is 'azure'."
diff --git a/infrastructure/commons/external_dns/variables.tf b/infrastructure/commons/external_dns/variables.tf
index 3b81fe10..f89f113c 100644
--- a/infrastructure/commons/external_dns/variables.tf
+++ b/infrastructure/commons/external_dns/variables.tf
@@ -152,8 +152,27 @@ variable "dns_provider_name" {
 # AZURE CONFIGURATION
 ###############################################################################
 
+variable "azure_workload_identity_enabled" {
+  description = "Enable Workload Identity for Azure DNS provider. When false, Service Principal auth is used and azure_client_secret is required."
+  type        = bool
+  default     = true
+}
+
+variable "azure_federated_credential_id" {
+  description = "Resource ID of the Azure federated identity credential for external-dns (required when dns_provider_name is 'azure' and azure_workload_identity_enabled is true). Pass module.iam_external_dns.id to enforce dependency ordering."
+  type        = string
+  default     = ""
+}
+
+variable "azure_client_secret" {
+  description = "Azure AD client secret for Service Principal auth (required when dns_provider_name is 'azure' and azure_workload_identity_enabled is false)."
+  type        = string
+  sensitive   = true
+  default     = ""
+}
+
 variable "azure_client_id" {
-  description = "Client ID of the Azure Managed Identity for Workload Identity (required when dns_provider_name is 'azure')"
+  description = "Client ID of the Azure Managed Identity for Workload Identity (required when dns_provider_name is 'azure' and azure_workload_identity_enabled is true)"
   type        = string
   default     = ""
 }
diff --git a/infrastructure/commons/istio/variables.tf b/infrastructure/commons/istio/variables.tf
index ca6a3257..cc29466b 100644
--- a/infrastructure/commons/istio/variables.tf
+++ b/infrastructure/commons/istio/variables.tf
@@ -21,9 +21,9 @@ variable "istiod_version" {
 }
 
 variable "istiod_replicas" {
-  description = "Number of istiod replicas. Default is 1 to preserve the previous behavior of this module for existing consumers; set to 2 (recommended) to let the pilot deployment tolerate node drains — the istiod chart installs a PodDisruptionBudget with minAvailable=1, and a single-replica istiod therefore blocks node rolling updates (e.g. EKS AMI bumps). This value is applied to both pilot.replicaCount and pilot.autoscaleMin; without the autoscaleMin override, the HPA (enabled by default with autoscaleMin=1) would scale back to 1 replica shortly after install."
+  description = "Number of istiod replicas. Set to 2+ to avoid PDB blocking node drains. Applied to both pilot.replicaCount and pilot.autoscaleMin to prevent the HPA from scaling back to 1."
   type        = number
-  default     = 1
+  default     = 2
 
   validation {
     condition     = var.istiod_replicas >= 1