diff --git a/changelogs/fragments/51661-fixing-azure-mysql-parameters.yaml b/changelogs/fragments/51661-fixing-azure-mysql-parameters.yaml
new file mode 100644
index 0000000000..e4ee63134c
--- /dev/null
+++ b/changelogs/fragments/51661-fixing-azure-mysql-parameters.yaml
@@ -0,0 +1,2 @@
+bugfixes:
+  - azure_rm_mysqlserver - fixed issues with passing parameters while updating existing server instance
diff --git a/lib/ansible/modules/cloud/azure/azure_rm_mysqlserver.py b/lib/ansible/modules/cloud/azure/azure_rm_mysqlserver.py
index 74141d820b..d4840e3d16 100644
--- a/lib/ansible/modules/cloud/azure/azure_rm_mysqlserver.py
+++ b/lib/ansible/modules/cloud/azure/azure_rm_mysqlserver.py
@@ -228,7 +228,7 @@ class AzureRMServers(AzureRMModuleBase):
                 elif key == "location":
                     self.parameters["location"] = kwargs[key]
                 elif key == "storage_mb":
-                    self.parameters.setdefault("properties", {})["storage_mb"] = kwargs[key]
+                    self.parameters.setdefault("properties", {}).setdefault("storage_profile", {})["storage_mb"] = kwargs[key]
                 elif key == "version":
                     self.parameters.setdefault("properties", {})["version"] = kwargs[key]
                 elif key == "enforce_ssl":
@@ -321,6 +321,8 @@ class AzureRMServers(AzureRMModuleBase):
                                                             server_name=self.name,
                                                             parameters=self.parameters)
             else:
+                # structure of parameters for update must be changed
+                self.parameters.update(self.parameters.pop("properties", {}))
                 response = self.mysql_client.servers.update(resource_group_name=self.resource_group,
                                                             server_name=self.name,
                                                             parameters=self.parameters)
diff --git a/test/integration/targets/azure_rm_mysqlserver/tasks/main.yml b/test/integration/targets/azure_rm_mysqlserver/tasks/main.yml
index d89d0d4d2b..43fc6cd525 100644
--- a/test/integration/targets/azure_rm_mysqlserver/tasks/main.yml
+++ b/test/integration/targets/azure_rm_mysqlserver/tasks/main.yml
@@ -63,6 +63,38 @@
       - output.changed == false
       - output.state == 'Ready'
 
+- name: Update instance of MySQL Server, change storage size
+  azure_rm_mysqlserver:
+    resource_group: "{{ resource_group }}"
+    name: mysqlsrv{{ rpfx }}
+    sku:
+      name: B_Gen5_1
+      tier: Basic
+    location: westus2
+    storage_mb: 128000
+    version: 5.6
+    enforce_ssl: True
+    admin_username: zimxyz
+    admin_password: Testpasswordxyz12!
+  register: output
+- name: Assert the state has not changed
+  assert:
+    that:
+      - output.changed
+      - output.state == 'Ready'
+- debug:
+    var: output
+
+- name: Gather facts MySQL Server
+  azure_rm_mysqlserver_facts:
+    resource_group: "{{ resource_group }}"
+    name: mysqlsrv{{ rpfx }}
+  register: output
+- name: Assert that storage size is correct
+  assert:
+    that:
+      - output.servers[0]['storage_mb'] == 128000
+
 - name: Create second instance of MySQL Server
   azure_rm_mysqlserver:
     resource_group: "{{ resource_group }}"