version.tf file can only contain one terraform block.
The first line of this terraform block should define required_version = ">= 1.1".
terraform block should contain a block called required_providers, the content of it is the restrictions for provider's version. Provider's version restriction should be sorted in alphabetical order, same for the assignment statements. version restrctions should use >= if not specified. No other kinds of restrictions can be used.
All the providers used in the module should be defined in required_providers.
Since a major version upgrade of the provider can lead to a breaking change, a major version upgrade of the provider must come with a major version upgrade of the module itself.
By rules, in the module code provider cannot be declared. The only exception is when the module indeed need different instances of the same kind of provider(Eg. manipulating resources across different locations or accounts), a provider block is allowed under terraform block in versions.tf file, and use configuration_aliases to associate them in terraform.required_providers. See details in this document.
provider block declared in the module can only be used to differentiate instances used in resource and data. Declaration of fields other than alias in provider block is strictly forbidden. It could lead to module users unable to utilize count, for_each or depends_on. Configurations of the provider instance should be passed in by the module users.