diff --git a/config/samples/featuregates.yaml b/config/samples/featuregates.yaml
index 79e83d92..eb8e1c8c 100644
--- a/config/samples/featuregates.yaml
+++ b/config/samples/featuregates.yaml
@@ -4,7 +4,6 @@ metadata:
   name: osc-feature-gates
   namespace: openshift-sandboxed-containers-operator
 data:
-  # timeTravel allows navigating through cluster states across time.
-  # It is useful for scenarios where you want to view historical data or
-  # predict future states based on current trends. Default is "false".
-  # timeTravel: "false"
+  # layeredImageDeployment allows deploying Kata using RHCOS layered image
+  # This feature gate needs a ConfigMap named layered-image-deploy-cm
+  layeredImageDeployment: "false"
diff --git a/config/samples/layered-image-deploy-cm.yaml b/config/samples/layered-image-deploy-cm.yaml
new file mode 100644
index 00000000..a7f33ffc
--- /dev/null
+++ b/config/samples/layered-image-deploy-cm.yaml
@@ -0,0 +1,9 @@
+apiVersion: v1
+data:
+  osImageURL: "quay.io/openshift_sandboxed_containers/kata-ocp415:tdx"
+  kernelArguments: "kvm_intel.tdx=1"
+
+kind: ConfigMap
+metadata:
+  name: layered-image-deploy-cm
+  namespace: openshift-sandboxed-containers-operator
diff --git a/controllers/fg_handler.go b/controllers/fg_handler.go
index c6b83747..fffeb2f8 100644
--- a/controllers/fg_handler.go
+++ b/controllers/fg_handler.go
@@ -11,10 +11,12 @@ import (
 const (
 	FgConfigMapName         = "osc-feature-gates"
 	ConfidentialFeatureGate = "confidential"
+	LayeredImageDeployment  = "layeredImageDeployment"
 )
 
 var DefaultFeatureGates = map[string]bool{
 	ConfidentialFeatureGate: false,
+	LayeredImageDeployment:  false,
 }
 
 type FeatureGateStatus struct {
@@ -95,6 +97,15 @@ func (r *KataConfigOpenShiftReconciler) processFeatureGates() error {
 		}
 	}
 
-	return err
+	// Check layered Image deployment FG
+	if IsEnabled(fgStatus, LayeredImageDeployment) {
+		r.Log.Info("Feature gate is enabled", "featuregate", LayeredImageDeployment)
+		// Perform the necessary actions
+		return r.handleLayeredImageDeploymentFeature(Enabled)
+	} else {
+		r.Log.Info("Feature gate is disabled", "featuregate", LayeredImageDeployment)
+		// Perform the necessary actions
+		return r.handleLayeredImageDeploymentFeature(Disabled)
+	}
 
 }
diff --git a/controllers/layered_image_handler.go b/controllers/layered_image_handler.go
new file mode 100644
index 00000000..d512ea0a
--- /dev/null
+++ b/controllers/layered_image_handler.go
@@ -0,0 +1,164 @@
+package controllers
+
+import (
+	"context"
+	"encoding/json"
+	"fmt"
+	"strings"
+
+	ignTypes "github.com/coreos/ignition/v2/config/v3_2/types"
+	mcfgv1 "github.com/openshift/machine-config-operator/pkg/apis/machineconfiguration.openshift.io/v1"
+	corev1 "k8s.io/api/core/v1"
+	metav1 "k8s.io/apimachinery/pkg/apis/meta/v1"
+	"k8s.io/apimachinery/pkg/runtime"
+	"k8s.io/apimachinery/pkg/types"
+)
+
+const (
+	LayeredImageDeployCm = "layered-image-deploy-cm"
+	image_mc_name        = "50-enable-sandboxed-containers-image"
+)
+
+// Process the LayeredImageDeployment feature gate (FG)
+// This method will be called by the processFeatureGates method during the beginning of the reconcile loop
+// The method will check for any existing MachineConfig related to KataConfig and return to the caller
+// by setting r.ImgMc to the image MachineConfig if present. This will allow the remainder of the reconcile loop
+// to use the image MachineConfig as needed.
+// If neither extension or image MachineConfig exists, and layeredImageDeployment feature is enabled,
+// then this method will create the image MachineConfig from the fg ConfigMap and set r.ImgMc to the
+// newly created image MachineConfig.
+// If layeredImageDeployment feature is disabled, then the method will reset r.ImgMc to nil
+// The key design aspect of this FG is that it has effect only during the creation of the KataConfig.
+// After creation of the KataConfig this FG has no effect.
+func (r *KataConfigOpenShiftReconciler) handleLayeredImageDeploymentFeature(state FeatureGateState) error {
+
+	// Check if MachineConfig exists and return the same without changing anything
+	mc, err := r.getExistingMachineConfig()
+	if err != nil {
+		r.Log.Info("Error in getting existing MachineConfig", "err", err)
+		return err
+	}
+
+	if mc != nil {
+		r.Log.Info("MachineConfig is already present. No changes will be done")
+		// If the MachineConfig is imageMachineConfig, then set r.ImgMc to the same
+		if mc.Name == image_mc_name {
+			r.ImgMc = mc
+		}
+		return nil
+	}
+
+	if state == Enabled {
+		r.Log.Info("LayeredImageDeployment feature is enabled")
+
+		cm := &corev1.ConfigMap{}
+		err := r.Client.Get(context.Background(), types.NamespacedName{
+			Name:      LayeredImageDeployCm,
+			Namespace: OperatorNamespace,
+		}, cm)
+		if err != nil {
+			r.Log.Info("Error in retrieving LayeredImageDeployment ConfigMap", "err", err)
+			return err
+		}
+
+		// Set the ImgMc here
+		r.ImgMc, err = r.createMachineConfigFromConfigMap(cm)
+		if err != nil {
+			r.Log.Info("Error in creating MachineConfig for LayeredImageDeployment from ConfigMap", "err", err)
+			return err
+		}
+
+	} else {
+		r.Log.Info("LayeredImageDeployment feature is disabled. Resetting ImgMc")
+		// Reset ImgMc
+		r.ImgMc = nil
+
+	}
+
+	return nil
+}
+
+func (r *KataConfigOpenShiftReconciler) getExistingMachineConfig() (*mcfgv1.MachineConfig, error) {
+	r.Log.Info("Getting any existing MachineConfigs related to KataConfig")
+
+	// Retrieve the existing MachineConfig for Kata - either extension or image
+	// Check for label "app":r.kataConfig.Name
+	// and name "50-enable-sandboxed-containers-extension" or name "50-enable-sandboxed-containers-image"
+	mcList := &mcfgv1.MachineConfigList{}
+	err := r.Client.List(context.Background(), mcList)
+	if err != nil {
+		r.Log.Info("Error in listing MachineConfigs", "err", err)
+		return nil, err
+	}
+
+	for _, mc := range mcList.Items {
+		if mc.Labels["app"] == r.kataConfig.Name &&
+			(mc.Name == extension_mc_name || mc.Name == image_mc_name) {
+			return &mc, nil
+		}
+	}
+
+	r.Log.Info("No existing MachineConfigs related to KataConfig found")
+
+	return nil, nil
+}
+
+// Method to create a new MachineConfig object from configMap data
+// The configMap data will have two keys: "osImageURL" and "kernelArgs"
+func (r *KataConfigOpenShiftReconciler) createMachineConfigFromConfigMap(cm *corev1.ConfigMap) (*mcfgv1.MachineConfig, error) {
+
+	// Get the osImageURL from the ConfigMap
+	// osImageURL is mandatory for creating a MachineConfig
+	osImageURL, exists := cm.Data["osImageURL"]
+	if !exists {
+		return nil, fmt.Errorf("osImageURL not found in ConfigMap")
+	}
+
+	ic := ignTypes.Config{
+		Ignition: ignTypes.Ignition{
+			Version: "3.2.0",
+		},
+	}
+
+	icb, err := json.Marshal(ic)
+	if err != nil {
+		return nil, err
+	}
+	mc := &mcfgv1.MachineConfig{
+		TypeMeta: metav1.TypeMeta{
+			APIVersion: "machineconfiguration.openshift.io/v1",
+			Kind:       "MachineConfig",
+		},
+		ObjectMeta: metav1.ObjectMeta{
+			Name:      image_mc_name,
+			Namespace: OperatorNamespace,
+		},
+		Spec: mcfgv1.MachineConfigSpec{
+			Config: runtime.RawExtension{
+				Raw: icb,
+			},
+			OSImageURL: osImageURL,
+		},
+	}
+
+	if kernelArguments, ok := cm.Data["kernelArguments"]; ok {
+		// Parse the kernel arguments and set them in the MachineConfig
+		// Note that in the configmap the kernel arguments are stored as a single string
+		// eg. "a=b c=d ..." and we need to split them into individual arguments
+		// eg ["a=b", "c=d", ...]
+		// Split the kernel arguments string into individual arguments
+		mc.Spec.KernelArguments = strings.Fields(kernelArguments)
+	}
+
+	// Set the required labels
+	mcp, err := r.getMcpName()
+	if err != nil {
+		return nil, err
+	}
+	mc.Labels = map[string]string{
+		"machineconfiguration.openshift.io/role": mcp,
+		"app":                                    r.kataConfig.Name,
+	}
+
+	return mc, nil
+}
diff --git a/controllers/openshift_controller.go b/controllers/openshift_controller.go
index 2d23834c..11ee5051 100644
--- a/controllers/openshift_controller.go
+++ b/controllers/openshift_controller.go
@@ -61,6 +61,8 @@ type KataConfigOpenShiftReconciler struct {
 	Scheme *runtime.Scheme
 
 	kataConfig *kataconfigurationv1.KataConfig
+
+	ImgMc *mcfgv1.MachineConfig
 }
 
 const (
@@ -494,6 +496,12 @@ func getExtensionName() string {
 func (r *KataConfigOpenShiftReconciler) newMCForCR(machinePool string) (*mcfgv1.MachineConfig, error) {
 	r.Log.Info("Creating MachineConfig for Custom Resource")
 
+	if r.ImgMc != nil {
+		r.Log.Info("Image based MachineConfig", "MachineConfig", r.ImgMc)
+		return r.ImgMc, nil
+	}
+
+	// Create extension MachineConfig
 	ic := ignTypes.Config{
 		Ignition: ignTypes.Ignition{
 			Version: "3.2.0",
@@ -528,6 +536,8 @@ func (r *KataConfigOpenShiftReconciler) newMCForCR(machinePool string) (*mcfgv1.
 		},
 	}
 
+	r.Log.Info("Extension based MachineConfig", "MachineConfig", mc)
+
 	return &mc, nil
 }
 
@@ -843,6 +853,8 @@ func (r *KataConfigOpenShiftReconciler) processKataConfigDeleteRequest() (ctrl.R
 	err = r.Client.Get(context.TODO(), types.NamespacedName{Name: mc.Name}, mc)
 	if err != nil && k8serrors.IsNotFound(err) {
 		isMcDeleted = true
+		// Reset ImgMc
+		r.ImgMc = nil
 	} else if err != nil {
 		return ctrl.Result{}, err
 	}
@@ -1053,7 +1065,7 @@ func (r *KataConfigOpenShiftReconciler) processKataConfigInstallRequest() (ctrl.
 		r.Log.Info("SCNodeRole is: " + machinePool)
 	}
 
-	wasMcJustCreated, err := r.createExtensionMc(machinePool)
+	wasMcJustCreated, err := r.createMc(machinePool)
 	if err != nil {
 		return ctrl.Result{Requeue: true}, nil
 	}
@@ -1281,7 +1293,7 @@ func (r *KataConfigOpenShiftReconciler) processKataConfigInstallRequest() (ctrl.
 // If the first return value is 'true' it means that the MC was just created
 // by this call, 'false' means that it's already existed.  As usual, the first
 // return value is only valid if the second one is nil.
-func (r *KataConfigOpenShiftReconciler) createExtensionMc(machinePool string) (bool, error) {
+func (r *KataConfigOpenShiftReconciler) createMc(machinePool string) (bool, error) {
 
 	// In case we're returning an error we want to make it explicit that
 	// the first return value is "not care".  Unfortunately golang seems
@@ -1289,16 +1301,16 @@ func (r *KataConfigOpenShiftReconciler) createExtensionMc(machinePool string) (b
 	// hence this work-around.
 	var dummy bool
 
-	/* Create Machine Config object to enable sandboxed containers RHCOS extension */
-	mc := &mcfgv1.MachineConfig{}
-	err := r.Client.Get(context.TODO(), types.NamespacedName{Name: extension_mc_name}, mc)
-	if err != nil && (k8serrors.IsNotFound(err) || k8serrors.IsGone(err)) {
+	/* Create Machine Config object to install sandboxed containers */
 
-		r.Log.Info("creating RHCOS extension MachineConfig")
-		mc, err = r.newMCForCR(machinePool)
-		if err != nil {
-			return dummy, err
-		}
+	r.Log.Info("creating RHCOS MachineConfig")
+	mc, err := r.newMCForCR(machinePool)
+	if err != nil {
+		return dummy, err
+	}
+
+	err = r.Client.Get(context.TODO(), types.NamespacedName{Name: mc.Name}, mc)
+	if err != nil && (k8serrors.IsNotFound(err) || k8serrors.IsGone(err)) {
 
 		err = r.Client.Create(context.TODO(), mc)
 		if err != nil {
@@ -1308,12 +1320,13 @@ func (r *KataConfigOpenShiftReconciler) createExtensionMc(machinePool string) (b
 		r.Log.Info("MachineConfig successfully created", "mc.Name", mc.Name)
 		return true, nil
 	} else if err != nil {
-		r.Log.Info("failed to retrieve extension MachineConfig", "err", err)
+		r.Log.Info("failed to retrieve MachineConfig", "err", err)
 		return dummy, err
 	} else {
-		r.Log.Info("extension MachineConfig already exists")
+		r.Log.Info("MachineConfig already exists")
 		return false, nil
 	}
+
 }
 
 func (r *KataConfigOpenShiftReconciler) makeReconcileRequest() reconcile.Request {