You should delete VM1. You recreate VM1, and then you add the network interface for VM1.
Note: When you create an Azure virtual machine (VM), you must create a virtual network (VNet) or use an existing VNet. You can change the subnet a VM is connected to after it's created, but you cannot change the VNet.
Reference:
https://docs.microsoft.com/en-us/azure/virtual-machines/windows/network-overview