Script for sending an e-mail via Office 365 (requires a valid Office 365 user with an Exchange mailbox). Useful for different scenarios, such as sending e-mail from an Azure Automation runbook.

Send-Office365MailMessage.ps1

$MailParameters = @{
 From = 'Office 365 User <office365-user@domain.com>'
 To = 'external-user@outlook.com'
 Subject = 'Test from PowerShell'
 Body = "Hello World"
 SmtpServer = 'smtp.office365.com'
 Port = '587'
 Credential = Get-Credential -UserName office365-user@domain.com -Message 'Specify Office 365 user credential'
 UseSsl = $true
 }

Send-MailMessage @MailParameters

@tnjkannan It seems to be authentication/authorization issues for the user specified. However, note the following statement from the Send-MailMessage documentation:

The Send-MailMessage cmdlet is obsolete. This cmdlet does not guarantee secure connections to SMTP servers. While there is no immediate replacement available in PowerShell, we recommend you do not use Send-MailMessage. For more information, see Platform Compatibility note DE0005.

One alternative approach I commonly see and use is calling Logic Apps from PowerShell (Invoke-RestMethod) in order to send e-mails via Office 365/Exchange Online.

Here is a great tutorial for doing so.