diff --git a/meta/io.murano/Classes/resources/LinuxMuranoInstance.yaml b/meta/io.murano/Classes/resources/LinuxMuranoInstance.yaml
index b061df0bd..ccd91749c 100644
--- a/meta/io.murano/Classes/resources/LinuxMuranoInstance.yaml
+++ b/meta/io.murano/Classes/resources/LinuxMuranoInstance.yaml
@@ -53,7 +53,9 @@ Methods:
   generateCloudConfig:
     Body:
         - $resources: new(sys:Resources)
-        - $muranoInitConf: $resources.yaml('murano-init.conf')
+        - $muranoInitConf: $resources.yaml('murano-init.conf').bind(dict(
+                instanceHostname  => $.name
+              ))
         - Return: $muranoInitConf
 
   generateUserData:
@@ -93,7 +95,7 @@ Methods:
 
         - $userData: $muranoScript.replace($muranoReplacements) + $initScript.replace($scriptReplacements)
         - Return: $userData
-  
+
   releaseResources:
     Body:
       - $region: $.getRegion()
@@ -104,4 +106,4 @@ Methods:
           - $template.resources: $template.resources.deleteAll($resourcesToDelete)
           - $region.stack.setTemplate($template)
 
-      - super($, $.releaseResources())
\ No newline at end of file
+      - super($, $.releaseResources())
diff --git a/meta/io.murano/Resources/murano-init.conf b/meta/io.murano/Resources/murano-init.conf
index f7c516061..5e0bb3c27 100644
--- a/meta/io.murano/Resources/murano-init.conf
+++ b/meta/io.murano/Resources/murano-init.conf
@@ -16,3 +16,5 @@
         - python-dev
         - python-setuptools
         - python-virtualenv
+
+    hostname: $instanceHostname
diff --git a/meta/io.murano/Resources/windows-init.ps1 b/meta/io.murano/Resources/windows-init.ps1
index 68a52428f..c12a0033f 100644
--- a/meta/io.murano/Resources/windows-init.ps1
+++ b/meta/io.murano/Resources/windows-init.ps1
@@ -17,6 +17,7 @@ $WindowsAgentConfigBase64 = '%AGENT_CONFIG_BASE64%'
 $WindowsAgentConfigFile = "C:\Murano\Agent\WindowsAgent.exe.config"
 $WindowsAgentLogFile = "C:\Murano\Agent\log.txt"
 
+$CurrentComputerName = HOSTNAME
 $NewComputerName = '%INTERNAL_HOSTNAME%'
 $MuranoFileShare = '\\%MURANO_SERVER_ADDRESS%\share'
 
@@ -63,13 +64,14 @@ Write-Log "Service has been updated."
 Write-Log "Adding environment variable 'MuranoFileShare' = '$MuranoFileShare' ..."
 [Environment]::SetEnvironmentVariable('MuranoFileShare', $MuranoFileShare, [EnvironmentVariableTarget]::Machine)
 Write-Log "Environment variable added."
+# (jose-phillips) If the Master Image or CloudBase-Init is already set the hostname this procedure fail.
+if ($CurrentComputerName -ne $NewComputerName){
+  Write-Log "Renaming computer to '$NewComputerName' ..."
+  $null = Rename-Computer -NewName $NewComputerName -Force
 
-Write-Log "Renaming computer to '$NewComputerName' ..."
-$null = Rename-Computer -NewName $NewComputerName -Force
-
-Write-Log "New name assigned, restart required."
-$RestartRequired = $true
-
+  Write-Log "New name assigned, restart required."
+  $RestartRequired = $true
+}
 
 Write-Log 'All done!'
 if ( $RestartRequired ) {