A novel type of rotatable diffraction volume gratings based on cholesteric liquid crystals with phototunable helix pitch is elaborated. For this purpose the cholesteric liquid crystalline mixture with high helix pitch tunability and reversible photoinduced helix handedness inversion containing azobenzene‐derivative of the chiral‐photochromic dopant is developed. It was shown that the prepared cholesteric mixture under the hybrid (homeotropic – planar) boundary conditions spontaneously forms a well‐oriented striped domain texture which acts as a phase grating. Under the effect of light the changes of helix pitch take place due to the molecular photoreaction of chiral‐photochromic dopant causing the variation of the period of striped domain structure and its rotation. The clockwise and counterclockwise rotation of the obtained gratings can be achieved by switching between UV and visible light, correspondingly. The maximum angle of the continuous rotation is ≈690°, while the total rotation caused by UV light illumination reaches ≈1220°. The creation of a variety of complex‐organized structures by local light exposure of the cholesteric domain texture is demonstrated. The observed advanced photooptical effects have potentially wide and important applications from scientific and applied points of view.