How to parametrize Azure DevOps Deployment YAML Pipelines to deploy to multiple environments

I have an Azure DevOps Deployment YAML Pipeline that creates an Azure App Service and deploys code to it. The actual pipeline is more complex, but I am simplifying it for this question.

Currently my pipeline can successfully deploy to a specific Azure Subscription (Service Connector) with resource names defined in variables.

I need to parametrize the pipeline so that it can deploy to several different environments (means Azure Subscriptions) using multiple Service Connectors. Each environment has a different Azure Resource naming convention.

Is there any way to read the value of pipeline variables from an XML or JSON file? This way I can have multiple config files for each environment and store them as part of my repository.

Is this a right approach for multi-environment deployment pipeline configuration?

You can use variable templates. There is another interesting link: Learn more about variable reuse with templates.

Here I have this flat folder structure (for the clarity of the sample):

.
|  deploy-app.job.yaml
|  deploy-app.pipeline.yaml
|  variables.dev.yaml
|  variables.prod.yaml

So here we're trying to run the reusable job deploy-app.job.yaml with different variable sets.

I've defined some variables in each variable.{env}.yaml files

# variables.dev.yaml
variables:
  vmImage: ubuntu-20.04
  serviceConnection: dev-service-connection

# variables.prod.yaml
variables:
  vmImage: ubuntu-20.04
  serviceConnection: prod-service-connection

The deploy-app.job.yaml file accepts a parameter that allow to inject a variable template:

# deploy-app.job.yaml
parameters:
- name: envVariablesTemplate
  type: string

jobs:
- deployment: deploy
  variables:
  # Inject the verianle template here
  - template: ${{ parameters.envVariablesTemplate }}
  pool:
    # Use the variable from the template
    vmImage: ${{ variables.vmImage }}
  strategy:
    runOnce:
      deploy:
        steps:
        - task: AzureCLI@2
          displayName: Hello from azure cli
          inputs:
            # Use the variable from the template
            azureSubscription: ${{ variables.serviceConnection }}
            scriptType: pscore
            scriptLocation: inlineScript
            inlineScript: echo 'Hello from azure cli'

In the main pipeline, I can create different stages and inject the desired vairables:

# deploy-app.pipeline..yaml
stages:
- stage: dev
  condition: succeeded()
  jobs:
  - template: ./deploy-app.job.yaml
    parameters:
      envVariablesTemplate: ./variables.dev.yaml

- stage: prod
  dependsOn: dev
  condition: succeeded()
  jobs:
  - template: ./deploy-app.job.yaml
    parameters:
      envVariablesTemplate: ./variables.prod.yaml

Based on your needs, you can add multiple variable templates, having a naming convention etc. Really up to you and depends on the complexity of your pipelines.