diff --git a/releasenotes/notes/dnsmasq-lxc-conflict-fix-c8968f6a16d033c6.yaml b/releasenotes/notes/dnsmasq-lxc-conflict-fix-c8968f6a16d033c6.yaml
new file mode 100644
index 00000000..e240a38c
--- /dev/null
+++ b/releasenotes/notes/dnsmasq-lxc-conflict-fix-c8968f6a16d033c6.yaml
@@ -0,0 +1,10 @@
+---
+fixes:
+  - |
+    In Ubuntu the ``dnsmasq`` package actually includes
+    init scripts and service configuration which
+    conflict with LXC and are best not included. The
+    actual dependent package is ``dnsmasq-base``. The
+    package list has been adjusted and a task added
+    to remove the ``dnsmasq`` package and purge the
+    related configuration files from all LXC hosts.
diff --git a/tasks/lxc_dnsmasq_cleanup.yml b/tasks/lxc_dnsmasq_cleanup.yml
deleted file mode 100644
index 7ef23a7d..00000000
--- a/tasks/lxc_dnsmasq_cleanup.yml
+++ /dev/null
@@ -1,28 +0,0 @@
----
-# Copyright 2014, Rackspace US, Inc.
-#
-# Licensed under the Apache License, Version 2.0 (the "License");
-# you may not use this file except in compliance with the License.
-# You may obtain a copy of the License at
-#
-#     http://www.apache.org/licenses/LICENSE-2.0
-#
-# Unless required by applicable law or agreed to in writing, software
-# distributed under the License is distributed on an "AS IS" BASIS,
-# WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
-# See the License for the specific language governing permissions and
-# limitations under the License.
-
-- name: Ensure dnsmasq stopped
-  service:
-    name: "dnsmasq"
-    state: "stopped"
-    enabled: "no"
-
-- name: Remove dnsmasq file(s)
-  file:
-    path: "{{ item }}"
-    state: "absent"
-  with_items:
-    - /var/run/dnsmasq/resolv.conf
-    - /etc/dnsmasq.conf
diff --git a/tasks/lxc_install_apt.yml b/tasks/lxc_install_apt.yml
index 37e9a9a9..54115166 100644
--- a/tasks/lxc_install_apt.yml
+++ b/tasks/lxc_install_apt.yml
@@ -13,6 +13,14 @@
 # See the License for the specific language governing permissions and
 # limitations under the License.
 
+- name: Remove conflicting packages
+  apt:
+    pkg: "{{ lxc_hosts_remove_distro_packages }}"
+    state: absent
+    purge: yes
+  tags:
+    - lxc-apt-packages
+
 - name: Install apt packages
   apt:
     pkg: "{{ lxc_hosts_distro_packages }}"
diff --git a/tasks/main.yml b/tasks/main.yml
index b119f86b..4dbe5284 100644
--- a/tasks/main.yml
+++ b/tasks/main.yml
@@ -62,10 +62,6 @@
   tags:
     - lxc_hosts-config
 
-- include: lxc_dnsmasq_cleanup.yml
-  tags:
-    - lxc_hosts-config
-
 - include: lxc_cache.yml
   tags:
     - lxc_hosts-install
diff --git a/vars/ubuntu-16.04.yml b/vars/ubuntu-16.04.yml
index e3383ff3..457790c3 100644
--- a/vars/ubuntu-16.04.yml
+++ b/vars/ubuntu-16.04.yml
@@ -26,7 +26,7 @@ lxc_hosts_distro_packages:
   - cgroup-lite
   - dbus
   - debootstrap
-  - dnsmasq
+  - dnsmasq-base
   - git
   - iptables
   - irqbalance
@@ -40,6 +40,10 @@ lxc_hosts_distro_packages:
   - systemd-container
   - pxz
 
+# Package to remove from the host
+lxc_hosts_remove_distro_packages:
+  - dnsmasq
+
 lxc_xz_bin: pxz
 
 system_config_dir: "/etc/default"