diff --git a/litellm/llms/azure/common_utils.py b/litellm/llms/azure/common_utils.py
index 4ebd54e8fcb..be34858b6ca 100644
--- a/litellm/llms/azure/common_utils.py
+++ b/litellm/llms/azure/common_utils.py
@@ -320,7 +320,7 @@ class BaseAzureLLM(BaseOpenAILLM):
         api_version: Optional[str],
         is_async: bool,
     ) -> dict:
-        azure_ad_token_provider: Optional[Callable[[], str]] = None
+        azure_ad_token_provider = litellm_params.get("azure_ad_token_provider")
         # If we have api_key, then we have higher priority
         azure_ad_token = litellm_params.get("azure_ad_token")
         tenant_id = litellm_params.get("tenant_id", os.getenv("AZURE_TENANT_ID"))
@@ -336,7 +336,11 @@ class BaseAzureLLM(BaseOpenAILLM):
         )
         max_retries = litellm_params.get("max_retries")
         timeout = litellm_params.get("timeout")
-        if not api_key and tenant_id and client_id and client_secret:
+        if (
+            not api_key
+            and azure_ad_token_provider is None
+            and tenant_id and client_id and client_secret
+        ):
             verbose_logger.debug(
                 "Using Azure AD Token Provider from Entra ID for Azure Auth"
             )
@@ -345,7 +349,7 @@ class BaseAzureLLM(BaseOpenAILLM):
                 client_id=client_id,
                 client_secret=client_secret,
             )
-        if azure_username and azure_password and client_id:
+        if azure_ad_token_provider is None and azure_username and azure_password and client_id:
             verbose_logger.debug("Using Azure Username and Password for Azure Auth")
             azure_ad_token_provider = get_azure_ad_token_from_username_password(
                 azure_username=azure_username,
diff --git a/tests/litellm/llms/azure/test_azure_common_utils.py b/tests/litellm/llms/azure/test_azure_common_utils.py
index ac5be085776..321c8c9b475 100644
--- a/tests/litellm/llms/azure/test_azure_common_utils.py
+++ b/tests/litellm/llms/azure/test_azure_common_utils.py
@@ -260,6 +260,26 @@ def test_initialize_with_oidc_token_no_credentials(setup_mocks, monkeypatch):
     # Verify expected result
     assert result["azure_ad_token"] == "mock-oidc-token"
 
+def test_initialize_with_ad_token_provider(setup_mocks, monkeypatch):
+    # Clear environment variables
+    monkeypatch.delenv("AZURE_CLIENT_ID", raising=False)
+    monkeypatch.delenv("AZURE_TENANT_ID", raising=False)
+
+    # Test with custom azure_ad_token_provider
+    result = BaseAzureLLM().initialize_azure_sdk_client(
+        litellm_params={
+            "azure_ad_token_provider": lambda: "mock-custom-token",
+        },
+        api_key=None,
+        api_base="https://test.openai.azure.com",
+        model_name="gpt-4",
+        api_version=None,
+        is_async=False,
+    )
+
+    # Verify expected result
+    assert result["azure_ad_token_provider"]() == "mock-custom-token"
+
 
 def test_initialize_with_enable_token_refresh(setup_mocks, monkeypatch):
     litellm._turn_on_debug()