diff --git a/pkg/controllers/termination/suite_test.go b/pkg/controllers/termination/suite_test.go
index beec62c8a280..9ecd8b9ffcac 100644
--- a/pkg/controllers/termination/suite_test.go
+++ b/pkg/controllers/termination/suite_test.go
@@ -103,6 +103,25 @@ var _ = Describe("Termination", func() {
 			ExpectReconcileSucceeded(ctx, controller, client.ObjectKeyFromObject(node))
 			ExpectNotFound(ctx, env.Client, node)
 		})
+		It("should exclude nodes from load balancers when terminating", func() {
+			// This is a kludge to prevent the node from being deleted before we can
+			// inspect its labels
+			podNoEvict := test.Pod(test.PodOptions{
+				NodeName: node.Name,
+				ObjectMeta: metav1.ObjectMeta{
+					Annotations:     map[string]string{v1alpha5.DoNotEvictPodAnnotationKey: "true"},
+					OwnerReferences: defaultOwnerRefs,
+				},
+			})
+
+			ExpectApplied(ctx, env.Client, node, podNoEvict)
+
+			Expect(env.Client.Delete(ctx, node)).To(Succeed())
+			node = ExpectNodeExists(ctx, env.Client, node.Name)
+			ExpectReconcileSucceeded(ctx, controller, client.ObjectKeyFromObject(node))
+			node = ExpectNodeExists(ctx, env.Client, node.Name)
+			Expect(node.Labels[v1.LabelNodeExcludeBalancers]).Should(Equal("karpenter"))
+		})
 		It("should not evict pods that tolerate unschedulable taint", func() {
 			podEvict := test.Pod(test.PodOptions{NodeName: node.Name, ObjectMeta: metav1.ObjectMeta{OwnerReferences: defaultOwnerRefs}})
 			podSkip := test.Pod(test.PodOptions{
diff --git a/pkg/controllers/termination/terminate.go b/pkg/controllers/termination/terminate.go
index 43ec6bcb9ac0..b31bfb289033 100644
--- a/pkg/controllers/termination/terminate.go
+++ b/pkg/controllers/termination/terminate.go
@@ -61,6 +61,11 @@ func (t *Terminator) cordon(ctx context.Context, node *v1.Node) error {
 	// 2. Cordon node
 	persisted := node.DeepCopy()
 	node.Spec.Unschedulable = true
+	// Handle nil map
+	if node.Labels == nil {
+		node.Labels = map[string]string{}
+	}
+	node.Labels[v1.LabelNodeExcludeBalancers] = "karpenter"
 	if err := t.KubeClient.Patch(ctx, node, client.MergeFrom(persisted)); err != nil {
 		return fmt.Errorf("patching node %s, %w", node.Name, err)
 	}