Decommission from one tenant to become separate tenant

This is a pretty common scenario for university/school district spinoffs — the domain decommissioning piece trips people up more than the mailbox migration itself, so a few things worth adding to what's already been said:

Domain removal has a real sequencing dependency. You can't add a domain to the new tenant while it's still verified/active in the parent tenant — it has to be fully removed from the source first (all UPNs, aliases, and mail-enabled objects referencing it cleared), which usually means a short window where users are on a temporary .onmicrosoft.com address before the domain lands in the new tenant. Worth planning that gap with end users ahead of time rather than letting it surprise them.

OneDrive and SharePoint are the part that actually gets "hairy," as mentioned above — mail and calendars map fairly cleanly tenant-to-tenant, but document libraries, site permissions, and sharing links don't migrate as a byproduct of moving mailboxes. That's usually a separate workstream with its own tooling and timeline, so it's worth scoping that out early rather than assuming it rides along with the mailbox move.

If there's any shared collaboration during the transition (the child entity still needs to coordinate with the parent for a while), it's worth deciding upfront whether you need any kind of free/busy or directory visibility between the two tenants during the cutover window — that's easy to forget until someone notices meetings stop showing availability correctly.

On tooling — alongside the other options mentioned in this thread, EdbMails Office 365 Migration also supports this exact tenant-to-tenant scenario (mailboxes, public folders, archive mailboxes, SharePoint, OneDrive, and Teams data) with incremental/delta sync, so re-running a migration pass after the domain swap doesn't duplicate anything that already moved. Good idea to run a pilot batch with a handful of mailboxes regardless of which tool you land on, just to validate how your specific tenant/domain sequencing behaves before committing the whole org.