Connection to Azure postgres server fails in spite of correct username

The @ sign in username works fine for objects but not connect strings. According to URI RFC-3986 username allows hex encoding. So replace the @ with %40. user@host:pw@fullhost becomes user%40host:pw@fullhost

As noted in the error text, you are required to follow the <username@hostname> format when trying to connect to postgresql server, whether you are doing it from psql client or using pgadmin. Using <username@hostname> format instead of just <username> should get rid of the error.

Read the quick-start documents for Azure portal and CLI to understand more about how to create and configure your postgres server.