Resolve env vars in agent.yaml and include them in agent create request (#6086)

* Resolve env vars in agent.yaml and include them in agent create request

* Add error handling

* Include operation ID in timeout error

* Update error message

* Update comment

* Revert change and use envsubst to resolve

* Simplify

* Address feedback

Author: JeffreyCA

cli/azd/extensions/azure.ai.agents/internal/pkg/agents/agent_yaml/yaml.go

@@ -81,7 +81,7 @@ type Workflow struct {
 type ContainerAgent struct {
 	AgentDefinition      `json:",inline" yaml:",inline"`
 	Protocols            []ProtocolVersionRecord `json:"protocols" yaml:"protocols"`
-	EnvironmentVariables *[]EnvironmentVariable  `json:"environmentVariables,omitempty" yaml:"environmentVariables,omitempty"`
+	EnvironmentVariables *[]EnvironmentVariable  `json:"environmentVariables,omitempty" yaml:"environment_variables,omitempty"`
 }
 
 // AgentManifest The following represents a manifest that can be used to create agents dynamically.

cli/azd/extensions/azure.ai.agents/internal/project/service_target_agent.go

@@ -19,6 +19,7 @@ import (
 	"github.com/Azure/azure-sdk-for-go/sdk/azcore/arm"
 	"github.com/Azure/azure-sdk-for-go/sdk/azidentity"
 	"github.com/azure/azure-dev/cli/azd/pkg/azdext"
+	"github.com/drone/envsubst"
 	"github.com/fatih/color"
 )
 
@@ -521,16 +522,29 @@ func (p *AgentServiceTargetProvider) deployHostedAgent(
 	fmt.Fprintf(os.Stderr, "Using endpoint: %s\n", azdEnv["AZURE_AI_PROJECT_ENDPOINT"])
 	fmt.Fprintf(os.Stderr, "Agent Name: %s\n", agentDef.Name)
 
-	// Step 2: Create agent request with image URL
-	request, err := agent_yaml.CreateAgentAPIRequestFromManifest(*agentManifest, agent_yaml.WithImageURL(fullImageURL))
+	// Step 2: Resolve environment variables from YAML using azd environment values
+	resolvedEnvVars := make(map[string]string)
+	hostedDef := agentManifest.Template.(agent_yaml.ContainerAgent)
+	if hostedDef.EnvironmentVariables != nil {
+		for _, envVar := range *hostedDef.EnvironmentVariables {
+			resolvedEnvVars[envVar.Name] = p.resolveEnvironmentVariables(envVar.Value, azdEnv)
+		}
+	}
+
+	// Step 3: Create agent request with image URL and resolved environment variables
+	request, err := agent_yaml.CreateAgentAPIRequestFromManifest(
+		*agentManifest,
+		agent_yaml.WithImageURL(fullImageURL),
+		agent_yaml.WithEnvironmentVariables(resolvedEnvVars),
+	)
 	if err != nil {
 		return nil, fmt.Errorf("failed to create agent request: %w", err)
 	}
 
 	// Display agent information
 	p.displayAgentInfo(request)
 
-	// Step 3: Create agent
+	// Step 4: Create agent
 	progress("Creating agent")
 	agentVersionResponse, err := p.createAgent(ctx, request, azdEnv, cred)
 	if err != nil {
@@ -544,7 +558,7 @@ func (p *AgentServiceTargetProvider) deployHostedAgent(
 		return nil, err
 	}
 
-	// Step 4: Start agent container
+	// Step 5: Start agent container
 	progress("Starting agent container")
 	err = p.startAgentContainer(ctx, agentManifest, agentVersionResponse, azdEnv, cred)
 	if err != nil {
@@ -655,7 +669,7 @@ func (p *AgentServiceTargetProvider) startAgentContainer(
 		for {
 			select {
 			case <-timeout:
-				return fmt.Errorf("timeout waiting for operation to complete after %v", maxWaitTime)
+				return fmt.Errorf("timeout waiting for operation (id: %s) to complete after %v", operation.Body.ID, maxWaitTime)
 			case <-ticker.C:
 				completedOperation, err := agentClient.GetAgentContainerOperation(
 					ctx, agentVersionResponse.Name, operation.Body.ID, apiVersion)
@@ -776,3 +790,16 @@ func (p *AgentServiceTargetProvider) registerAgentEnvironmentVariables(
 
 	return nil
 }
+
+// resolveEnvironmentVariables resolves ${ENV_VAR} style references in value using azd environment variables.
+// Supports default values (e.g., "${VAR:-default}") and multiple expressions (e.g., "${VAR1}-${VAR2}").
+func (p *AgentServiceTargetProvider) resolveEnvironmentVariables(value string, azdEnv map[string]string) string {
+	resolved, err := envsubst.Eval(value, func(varName string) string {
+		return azdEnv[varName]
+	})
+	if err != nil {
+		// If resolution fails, return original value
+		return value
+	}
+	return resolved
+}