diff --git a/nova/conductor/manager.py b/nova/conductor/manager.py
index 45607ef87efd..c3544cbabafb 100644
--- a/nova/conductor/manager.py
+++ b/nova/conductor/manager.py
@@ -744,9 +744,19 @@ class ComputeTaskManager(base.Base):
                         context, instance, exc, legacy_request_spec,
                         requested_networks)
                     return
-            instance.availability_zone = (
-                availability_zones.get_host_availability_zone(context,
-                        host.service_host))
+
+            try:
+                instance.availability_zone = (
+                    availability_zones.get_host_availability_zone(context,
+                            host.service_host))
+            except Exception as exc:
+                # Put the instance into ERROR state, set task_state to None,
+                # inject a fault, etc.
+                self._cleanup_when_reschedule_fails(
+                    context, instance, exc, legacy_request_spec,
+                    requested_networks)
+                continue
+
             try:
                 # NOTE(danms): This saves the az change above, refreshes our
                 # instance, and tells us if it has been deleted underneath us
diff --git a/nova/tests/unit/conductor/test_conductor.py b/nova/tests/unit/conductor/test_conductor.py
index 1c25c21de518..0f6689eba243 100644
--- a/nova/tests/unit/conductor/test_conductor.py
+++ b/nova/tests/unit/conductor/test_conductor.py
@@ -3152,6 +3152,50 @@ class ConductorTaskTestCase(_BaseTaskTestCase, test_compute.BaseTestCase):
         tb = mock_notify.call_args_list[0][0][6]
         self.assertIn('Traceback (most recent call last):', tb)
 
+    @mock.patch('nova.scheduler.utils.claim_resources', return_value=True)
+    @mock.patch('nova.scheduler.utils.fill_provider_mapping')
+    @mock.patch('nova.availability_zones.get_host_availability_zone',
+                side_effect=db_exc.CantStartEngineError)
+    @mock.patch('nova.conductor.manager.ComputeTaskManager.'
+                '_cleanup_when_reschedule_fails')
+    @mock.patch('nova.objects.Instance.save')
+    def test_build_reschedule_get_az_error(self, mock_save, mock_cleanup,
+                                           mock_get_az, mock_fill, mock_claim):
+        """Tests a scenario where rescheduling during a build fails trying to
+        get the AZ for the selected host will put the instance into a terminal
+        (ERROR) state.
+        """
+        instance = fake_instance.fake_instance_obj(self.context)
+        image = objects.ImageMeta()
+        requested_networks = objects.NetworkRequestList()
+        request_spec = fake_request_spec.fake_spec_obj()
+        host_lists = copy.deepcopy(fake_host_lists_alt)
+        filter_props = {}
+        # Pre-populate the filter properties with the initial host we tried to
+        # build on which failed and triggered a reschedule.
+        host1 = host_lists[0].pop(0)
+        scheduler_utils.populate_filter_properties(filter_props, host1)
+        # We have to save off the first alternate we try since build_instances
+        # modifies the host_lists list.
+        host2 = host_lists[0][0]
+
+        self.conductor.build_instances(
+            self.context, [instance], image, filter_props,
+            mock.sentinel.admin_password, mock.sentinel.injected_files,
+            requested_networks, mock.sentinel.security_groups,
+            request_spec=request_spec, host_lists=host_lists)
+
+        mock_claim.assert_called_once()
+        mock_fill.assert_called_once()
+        mock_get_az.assert_called_once_with(self.context, host2.service_host)
+        mock_cleanup.assert_called_once_with(
+            self.context, instance,
+            test.MatchType(db_exc.CantStartEngineError), test.MatchType(dict),
+            requested_networks)
+        # Assert that we did not continue processing the instance once we
+        # handled the error.
+        mock_save.assert_not_called()
+
     def test_cleanup_allocated_networks_none_requested(self):
         # Tests that we don't deallocate networks if 'none' were specifically
         # requested.