On many chances you may need to configure some domains using .local suffix. Unfortunately this is covered by RFC 6762 (multicast DNS). On specific Linux distributions you will not be able to resolv such domains using DNS server you set either in the machine or in the cloud settings (for instance Azure).

How to you know that the DNS query is not reaching your desired DNS server? In case you use named, then first enable query logging by the following comman:

rndc querylog on

Now DNS queries from the clients who set that particular DNS server as its resolved will be visible in system logger file, like /var/log/messages. Then try to make a ping or curl to the desired domain address with .local suffix and check if it appears in the DNS server log. You can also force DNS query to reach that DNS server by using dig command:

dig yourdomain.local @yourdnsserver

If it’s present in DNS server log file then you’re confident that if you reconfigure your client machine it will work properly. To do this on Ubuntu 20 few things are required. First one is to have IP configuration fixed (some yaml file in /etc/netplan/ directory):

network:
    ethernets:
        eth0:
            dhcp4: no
            addresses:
            - 10.99.99.10/24
            gateway4: 10.99.99.1
            nameservers:
              addresses: [10.99.99.20]
            dhcp4-overrides:
                route-metric: 100
            dhcp6: false
            match:
                driver: hv_netvsc
                macaddress: 60:45:bd:94:4a:85
            set-name: eth0
    version: 2

And also as suggested in the netplan configuration file, to disable cloud init feature create file in /etc/cloud/cloud.cfg.d/99-disable-network-config.cfg with the following content:

network: {config: disabled}

Then reapply network configuration:

sudo netplan try

For me, personally, it is sometimes overcomplicated as comparing to CentOS distribution. Now with the fixed settings that should not be overwritten by some other processes you can proceed with disabling local DNS stub listener:

cd /etc/
sudo ln -sf ../run/systemd/resolve/resolv.conf
cd /etc/systemd/
sudo sed -i -e 's/#DNSStubListener=yes/DNSStubListener=no/' resolved.conf
sudo systemctl restart systemd-resolved

You can put your own desired DNS server in the /etc/systemd/resolved.conf file. After all of these operations try ping, curl or wget with your .local domain and check if this query appears in the DNS server log file.