diff --git a/nemo/lightning/io/connector.py b/nemo/lightning/io/connector.py
index 7d81e631d6f1..be9718797310 100644
--- a/nemo/lightning/io/connector.py
+++ b/nemo/lightning/io/connector.py
@@ -7,6 +7,8 @@
 
 import pytorch_lightning as pl
 from filelock import FileLock, Timeout
+from pytorch_lightning.trainer.states import TrainerFn
+
 
 # Dynamically inherit from the correct Path subclass based on the operating system.
 if os.name == 'nt':
@@ -139,26 +141,25 @@ def nemo_setup(self, model: pl.LightningModule, trainer: Optional[pl.Trainer] =
         Args:
             model (pl.LightningModule): The model to be set up.
             trainer (Optional[pl.Trainer]): The trainer to be used, if not provided a new one will be created.
-
         Returns
         -------
             pl.Trainer: The trainer configured with the model and strategy.
         """
-        from nemo.lightning import MegatronStrategy, Trainer
-        from nemo.lightning._strategy_lib import megatron_lazy_init_context
+        from nemo.lightning import MegatronStrategy, Trainer, _strategy_lib
 
         _trainer = trainer or Trainer(
-            devices=1, accelerator="cpu", strategy=MegatronStrategy(store_optimizer_states=False)
+            devices=1,
+            accelerator="cpu",
+            strategy=MegatronStrategy(ckpt_save_optimizer=False, always_save_context=True),
         )
-
+        _trainer.state.fn = TrainerFn.FITTING  # needed for proper save.
         _trainer.strategy.connect(model)
         _trainer.strategy.setup_environment()
 
         if not model.state_dict():
             _trainer.strategy.lazy_init = True
-            with _trainer.init_module(), megatron_lazy_init_context(model.config):
+            with _trainer.init_module(), _strategy_lib.megatron_lazy_init_context(model.config):
                 model.configure_model()
-
         return _trainer
 
     def nemo_save(self, output_path: Path, trainer: pl.Trainer, dump_io: bool = True) -> None:
@@ -170,16 +171,20 @@ def nemo_save(self, output_path: Path, trainer: pl.Trainer, dump_io: bool = True
             trainer (pl.Trainer): The trainer with the strategy to save the model.
             dump_io (bool): If True, the IO configuration will be saved to the output path.
         """
+        # Import here to avoid circular import
+        from nemo.lightning.pytorch.callbacks.model_checkpoint import ModelCheckpoint
+
         trainer.strategy._setup_optimizers = False
         trainer.strategy._init_model_parallel = False
         trainer.strategy.setup(trainer)
-        trainer.save_checkpoint(output_path)
+        output_path = Path(output_path)
+        trainer.save_checkpoint(output_path / ModelCheckpoint.WEIGHTS_PATH)
 
         from nemo.lightning.io.pl import TrainerContext
         from nemo.utils.get_rank import is_global_rank_zero
 
         if is_global_rank_zero() and dump_io:
-            TrainerContext.from_trainer(trainer).io_dump(output_path)
+            TrainerContext.from_trainer(trainer).io_dump(output_path / ModelCheckpoint.CONTEXT_PATH)
 
     def nemo_load(
         self, path: Path, trainer: Optional[pl.Trainer] = None, cpu: bool = True
diff --git a/nemo/lightning/pytorch/callbacks/model_checkpoint.py b/nemo/lightning/pytorch/callbacks/model_checkpoint.py
index 6aee365a3f60..770ee44c43aa 100644
--- a/nemo/lightning/pytorch/callbacks/model_checkpoint.py
+++ b/nemo/lightning/pytorch/callbacks/model_checkpoint.py
@@ -57,8 +57,9 @@ class ModelCheckpoint(PTLModelCheckpoint):
         async_save: Whether to enable asynchronous checkpointing.
     """
 
-    UNFINISHED_CHECKPOINT_SUFFIX = "-unfinished"
-    WEIGHTS_PATH = "weights"
+    UNFINISHED_CHECKPOINT_SUFFIX: str = "-unfinished"
+    WEIGHTS_PATH: str = "weights"
+    CONTEXT_PATH: str = "context"
 
     def __init__(
         self,
@@ -277,7 +278,7 @@ def on_train_end(self, trainer, pl_module):
                 else:
                     super()._save_last_checkpoint(trainer, monitor_candidates)
             if self.save_context_on_train_end and not self.always_save_context and is_global_rank_zero():
-                TrainerContext.from_trainer(trainer).io_dump(ckpt_to_dir(self.last_model_path) / "context")
+                TrainerContext.from_trainer(trainer).io_dump(ckpt_to_dir(self.last_model_path) / self.CONTEXT_PATH)
         # Call parent on_train_end() to save the -last checkpoint
         super().on_train_end(trainer, pl_module)
 
@@ -449,7 +450,7 @@ def _save_checkpoint(self, trainer: 'pytorch_lightning.Trainer', filepath: str)
             trainer.save_checkpoint(ckpt_filepath, save_weights_only, storage_options=storage_options)
 
             if self.always_save_context and is_global_rank_zero():
-                TrainerContext.from_trainer(trainer).io_dump(ckpt_to_dir(filepath) / "context")
+                TrainerContext.from_trainer(trainer).io_dump(ckpt_to_dir(filepath) / self.CONTEXT_PATH)
 
             if self.async_save:
                 logging.info(f'Scheduled async checkpoint save for {filepath}')