Best practices to establish Dev/Test environments for Microsoft 365

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We are trying to move a heavily customized SharePoint environment from on premise to cloud (Microsoft 365). We are looking for the best practices to establish cost effective development and test environments which are isolated from PROD tenant(or don’t impact it in any way) for developing and testing all type of customization e.g. SharePoint framework components, Power Platform to build applications etc. Basic principle is isolation and code/customization should be easy to promote to higher environment. I know many people/organizations must have solved this problem. Any recommendation is greatly appreciated!

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Any recommendation/guidance from Microsoft?