Once you enter the admin center, you should go to the Environments page. Here, you can see a list of the existing environments and sort them by the desired column if necessary:

How to Create a New Sandbox Environment in Dynamics 365

There are two environments in the screenshot.

To create a new environment, click on the "+ New" button in the upper left corner, and a panel with the settings for the new environment will open on the right:

sandbox Environments in Dynamics 365 - tutorial

Now, you need to specify the basic settings for your new environment:

Name: A unique name for the environment you are creating.
Region: The region where your environment will be hosted. The closer the region is to potential users, the lower the latency and, therefore, the better the performance.
"Get new features early": when you intend to get access to new features and updates before they are officially released, click on "Yes".
Type: The environment type.
Purpose: A brief description of this environment’s purpose.
"Add a Dataverse data store": opt for "Yes" if you want to add a Dataverse data store to this environment.
"Pay-as-you-go with Azure": to associate this environment with an Azure subscription to pay for specific Power Platform services, like Dataverse and Power Apps, select "Yes." This action will allow paying only for the resources and services you actually use, which is cost-effective.

! Note. If you have selected to create a database, you will be asked for additional settings in the next step:

Language: This is the default language for this environment.
URL: Your organization's unique URL to be used to access your environment.
Currency: The primary currency used for reporting in this environment.
"Enable Dynamics 365 apps": If you intend to deploy such apps as Dynamics 365 Supply Chain Management or Dynamics 365 Sales automatically, press "Yes."

! Note. You must have the appropriate Dynamics 365 license to click on "Yes." If you do not select "Yes" during the database creation, you will not be able to change this later and install Dynamics 365 apps in this environment.

"Deploy sample apps and data": to enable the sample apps and data, press "Yes". Sample data is useful for experimentation and learning.

! Note. Set "Enable Dynamics 365 apps" to "No" to make this setting available.

Security group: to limit access to this environment, choose a security group. Click on "No" for public access.

Once you have created it, you can go inside the environment you have created, view the settings, or make changes:

what is sandbox Environments in Dynamics 365

The top menu allows you to perform basic actions with the environment. For this, specify the following parameters:

Settings: here, you can enter the settings change mode.
Convert to production allows you to convert the current environment to a production one.
Backup + restore allows you to create backup copies or restore data from them.
Reset allows you to reset the environment to its original state, deleting all data, settings, and configurations created after its creation.
Delete: deleting an environment completely destroys it as well as all the data and configurations associated with it.