diff --git a/meta/io.murano/Classes/resources/Instance.yaml b/meta/io.murano/Classes/resources/Instance.yaml
index 24b75407..236eea85 100644
--- a/meta/io.murano/Classes/resources/Instance.yaml
+++ b/meta/io.murano/Classes/resources/Instance.yaml
@@ -240,28 +240,15 @@ Methods:
               - $.setAttr(fipAssigned, true)
 
   destroy:
-    # Fixme(smelikyan): We need to remove all associated resources on destroy
+    # FIXME(smelikyan): All allocated resources should be cleaned-up on destroy
+    # Now no clean-up happens here cause we don't track all native resources
+    # that are allocated at the moment in descendants of Instance or other
+    # classes that may allocate resource dependent on OS::Nova:Server used
+    # as underlying implementation for Instance. This can cause
+    # resource leak when environment is updated. Resources are cleaned-up only
+    # when whole Environment is deleted (alongside with Heat stack deletion).
+    # https://bugs.launchpad.net/murano/+bug/1359998
     Body:
-      - $template: $.environment.stack.current()
-      # Remove OS::Nova::Server resource
-      - $patchBlock:
-          op: remove
-          path: format('/resources/{0}', $.name)
-      - $template: patch($template, $patchBlock)
-      # Remove Ip Addresses Outputs assigned to this Instance
-      - $assignedIpBlock:
-          op: remove
-          path: format('/outputs/{0}-assigned-ip', $.name)
-      - $template: patch($template, $assignedIpBlock)
-      # Remove Floatting IP Addresses Outputs
-      - If: $.getAttr(fipAssigned, false)
-        Then:
-          - $assignedFloatingIpBlock:
-              op: remove
-              path: format('/outputs/{0}-FloatingIPaddress', $.name)
-          - $template: patch($template, $assignedFloatingIpBlock)
-      - $.environment.stack.setTemplate($template)
-      - $.environment.stack.push()
       - $.environment.instanceNotifier.untrackCloudInstance($this)
 
   createDefaultInstanceSecurityGroupRules:
diff --git a/murano/tests/functional/engine/base.py b/murano/tests/functional/engine/base.py
index ec6e0243..a1b3b047 100644
--- a/murano/tests/functional/engine/base.py
+++ b/murano/tests/functional/engine/base.py
@@ -402,6 +402,9 @@ class MuranoBase(testtools.TestCase, testtools.testcase.WithAttributes,
                 return stack
 
     def test_instance_refs_are_removed_after_application_is_removed(self):
+        # FIXME(sergmelikyan): Revise this as part of proper fix for #1359998
+        self.skipTest('Skipped until proper fix for #1359998 is proposed')
+
         name = 'e' + uuid.uuid4().hex
 
         # create environment with telnet application
diff --git a/murano/tests/unit/core_library/__init__.py b/murano/tests/unit/core_library/__init__.py
new file mode 100644
index 00000000..e69de29b
diff --git a/murano/tests/unit/core_library/instance/__init__.py b/murano/tests/unit/core_library/instance/__init__.py
new file mode 100644
index 00000000..e69de29b
diff --git a/murano/tests/unit/core_library/instance/test_destroy/__init__.py b/murano/tests/unit/core_library/instance/test_destroy/__init__.py
new file mode 100644
index 00000000..e69de29b
diff --git a/murano/tests/unit/core_library/instance/test_destroy/test_destroy.py b/murano/tests/unit/core_library/instance/test_destroy/test_destroy.py
index 7af04268..08945d77 100644
--- a/murano/tests/unit/core_library/instance/test_destroy/test_destroy.py
+++ b/murano/tests/unit/core_library/instance/test_destroy/test_destroy.py
@@ -40,6 +40,9 @@ TEMPLATE = {
 
 class TestDestroy(test_case.DslTestCase):
     def test_destroy_removes_ip_address_from_outputs(self):
+        # FIXME(sergmelikyan): Revise this as part of proper fix for #1359998
+        self.skipTest('skipped until proper fix for #1359998 is proposed')
+
         heat_stack_obj = om.Object('io.murano.system.HeatStack')
         instance_obj = om.Object(
             'io.murano.resources.Instance',