Certain PowerShell Server settings will require special permissions on the system to allow the user log on with the requested logon type. The following error indicates that one or more of those permissions have not been granted:

Client failed authentication: LogonUser() returned error 0×00000569 (Logon failure: the user has not been granted the requested logon type at this computer)

This error typically occurs when the user logging in is part of a different domain than the user that is used to run PowerShell Server. The following is a list of the settings that require these special permissions, and the rights they require. To change these permissions, simply open the Local Security Policy, and these rights can be accessed through Security Settings/Local Policies/User Rights Assignment

Network Logon:

When the Logon Type in the Security tab is set to Network Logon, the user logging in will need to be granted the Access this computer from the network right in the Local Security Policy.

Interactive Logon:

When the Logon Type in the Security tab is set to Interactive Logon, the user logging in will need to be granted the Allow log on locally right in the Local Security Policy.

Isolate Sessions:

When the Isolate Sessions option is checked in the Other tab, the user logging in will need to be granted the Log on as a batch job right in the Local Security Policy.