We have a Virtual machine (lets call this one source) that is being hosted locally with a 1TB disk space (that's how big the virtual disk is) and it has been replicated remotely via Veeam to an off-site server (lets call this clone).

However, there has been some server configuration changes that has made source not require as much disk space.

I am contemplating shrinking the disk size of source, or using the standalone converter to create a new image with a much smaller disk size requirement (about 300GB). The reason behind this is to lessen the time required for the "Discovering replica VM" step during the replication process.

My question is what happens to clone when the replication job is run? Do I need to redo the replication/set up a new backup to create an initial seed for source? Will the job automatically pick up that the disk size has shank and adjust the disk size of clone appropriately? What is the best method for accomplishing this?