The packages installed are as follows:

root@:/var/lib/nova/instances/e05d55df-85e2-44e7-8ea7-f7f060fbc3ba# apt policy 
nova-common
nova-common:
  Installed: 2:21.1.0-0ubuntu1
  Candidate: 2:21.1.0-0ubuntu1
  Version table:
 *** 2:21.1.0-0ubuntu1 500
        500 http://us.archive.ubuntu.com/ubuntu focal-updates/main amd64 
Packages
        500 http://us.archive.ubuntu.com/ubuntu focal-updates/main i386 Packages
        100 /var/lib/dpkg/status
     2:21.0.0~b3~git2020041013.57ff308d6d-0ubuntu2 500
        500 http://us.archive.ubuntu.com/ubuntu focal/main amd64 Packages
        500 http://us.archive.ubuntu.com/ubuntu focal/main i386 Packages

Rebooted after upgrading and all procedures followed as stated by above
posts but still getting the error.

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https://bugs.launchpad.net/bugs/1896617

Title:
  [SRU] Creation of image (or live snapshot) from the existing VM fails
  if libvirt-image-backend is configured to qcow2 starting from Ussuri

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