If you have VMware vCenter – Click Migrate
For those of us who do not have VMware vCenter:
1. Shutdown the VM
2. SSH to the ESXi machine and type:
vmkfstools -i /vmfs/volumes/datastore1/NAME-OF-VM/NAME-OF-VM.vmdk /vmfs/volumes/datastore1/NAME-OF-VM/NAME-OF-VM-thin.vmdk -d ‘thin’ -a lsilogic
Once the copy is done, go into the settings of your VM, delete the hard disk, and add a new hard disk pointing to the “thin” vmdk you created. Boot your vm, if it all works then you can use the datastore browser to delete the thick vmdk and you are done.