If you have an existing virtual network, either select an existing empty subnet or create a new subnet in your existing virtual network solely for use by the application gateway. Verify that you have a working virtual network with a valid subnet. Make sure that no virtual machines or cloud deployments are using the subnet. The application gateway must be by itself in a virtual network subnet. Reference: https://social.msdn.microsoft.com/Forums/azure/en-US/b09367f9-5d01-4cda-9127-b7a506a0a151/cant-create-application-gateway?forum=WAVirtualMachinesVirtualNetwork https://docs.microsoft.com/en-us/azure/application-gateway/application-gateway-create-gateway