diff --git a/heat/engine/resources/openstack/heat/resource_group.py b/heat/engine/resources/openstack/heat/resource_group.py
index 48ef05ae93..1bdc0c312e 100644
--- a/heat/engine/resources/openstack/heat/resource_group.py
+++ b/heat/engine/resources/openstack/heat/resource_group.py
@@ -15,6 +15,7 @@ import collections
 import copy
 import functools
 import itertools
+import math
 
 from oslo_log import log as logging
 
@@ -433,18 +434,18 @@ class ResourceGroup(stack_resource.StackResource):
                 return False
         return True
 
-    def _run_to_completion(self, template, timeout):
+    def _run_to_completion(self, template, timeout_mins):
         updater = self.update_with_template(template, {},
-                                            timeout)
+                                            timeout_mins)
 
         while not super(ResourceGroup,
                         self).check_update_complete(updater):
             yield
 
-    def _run_update(self, total_capacity, max_updates, timeout):
+    def _run_update(self, total_capacity, max_updates, timeout_mins):
         template = self._assemble_for_rolling_update(total_capacity,
                                                      max_updates)
-        return self._run_to_completion(template, timeout)
+        return self._run_to_completion(template, timeout_mins)
 
     def check_update_complete(self, checkers):
         for checker in checkers:
@@ -776,13 +777,18 @@ class ResourceGroup(stack_resource.StackResource):
 
         batches = list(self._get_batches(self.get_size(), curr_cap, batch_size,
                                          min_in_service))
-        update_timeout = self._update_timeout(len(batches), pause_sec)
+        update_timeout_secs = self._update_timeout(len(batches), pause_sec)
+
+        # NOTE(gibi) update_timeout is in seconds but the _run_update
+        # eventually calls StackResource.update_with_template that takes
+        # timeout in minutes so we need to convert here.
+        update_timeout_mins = math.ceil(update_timeout_secs / 60)
 
         def tasks():
             for index, (curr_cap, max_upd) in enumerate(batches):
                 yield scheduler.TaskRunner(self._run_update,
                                            curr_cap, max_upd,
-                                           update_timeout)
+                                           update_timeout_mins)
 
                 if index < (len(batches) - 1) and pause_sec > 0:
                     yield scheduler.TaskRunner(pause_between_batch, pause_sec)
diff --git a/heat_integrationtests/functional/test_resource_group.py b/heat_integrationtests/functional/test_resource_group.py
index 999d411225..07be7f24c5 100644
--- a/heat_integrationtests/functional/test_resource_group.py
+++ b/heat_integrationtests/functional/test_resource_group.py
@@ -181,15 +181,7 @@ resources:
                 nested_stack = self.client.stacks.get(res.physical_resource_id)
                 timeouts.add(nested_stack.timeout_mins)
 
-        # FIXME(gibi): This is bug story/2009237 as the timeout calculation of
-        # nested resource groups are broken. It is using seconds for the
-        # calculation but then pass that to functions expecting timeouts in
-        # minutes leading to increasing timeout value with each nesting level.
-        self.assertEqual({35939, 599}, timeouts)
-        # After the bug is fixed we expect timeouts less than the overall
-        # timeout requested for the whole stack.
-
-        # self.assertEqual({10}, timeouts)
+        self.assertEqual({10}, timeouts)
 
     def test_update_increase_decrease_count(self):
         # create stack with resource group count 2