Pour milk into the instant pot. Select the yogurt setting and then select pasteurize. Set for 3 minutes.
Optional step- once the cycle is finished, run it through the cycle again for 3 minutes.
After pasteurization, the milk should be between 161° and 180°.
Cool milk to 105°. Add yogurt starter and stir gently.
Put the insert back into instant pot and set on ferment for 12 hours.
Once the fermentation is finished, pour yogurt into a cheesecloth lined colander and set over a large bowl. Strain the yogurt in the fridge for 4 hours. Stir in sugar if using and refrigerate.