diff --git a/.github/workflows/e2e-fixture-test.yml b/.github/workflows/e2e-fixture-test.yml
index d4f5604b87..f0895ae593 100644
--- a/.github/workflows/e2e-fixture-test.yml
+++ b/.github/workflows/e2e-fixture-test.yml
@@ -30,6 +30,7 @@ jobs:
 
     - name: Set Up Environment and Run BMO e2e Tests
       env:
-        E2E_CONF_FILE: ${GITHUB_WORKSPACE}/test/e2e/config/fixture.yaml
+        E2E_CONF_FILE: ${{ github.workspace }}/test/e2e/config/fixture.yaml
         USE_EXISTING_CLUSTER: "false"
+        BMO_RELEASE_BRANCH: "release-0.4"
       run: make test-e2e
diff --git a/Makefile b/Makefile
index 0ab887685d..009e7dff94 100644
--- a/Makefile
+++ b/Makefile
@@ -104,6 +104,9 @@ unit-verbose: ## Run unit tests with verbose output
 
 ARTIFACTS ?= ${ROOT_DIR}/test/e2e/_artifacts
 
+e2e-ensure-upgrade-kustomization: 
+	./hack/e2e/ensure_kustomization_paths.sh
+
 .PHONY: test-e2e
 test-e2e: $(GINKGO) ## Run the end-to-end tests
 	$(GINKGO) -v --trace -poll-progress-after=$(GINKGO_POLL_PROGRESS_AFTER) \
@@ -112,7 +115,7 @@ test-e2e: $(GINKGO) ## Run the end-to-end tests
 		--output-dir="$(ARTIFACTS)" --junit-report="junit.e2e_suite.1.xml" $(GINKGO_ARGS) test/e2e -- \
 		-e2e.config="$(E2E_CONF_FILE)" -e2e.use-existing-cluster=$(USE_EXISTING_CLUSTER) \
 		-e2e.skip-resource-cleanup=$(SKIP_RESOURCE_CLEANUP) -e2e.artifacts-folder="$(ARTIFACTS)"
-
+	
 ## --------------------------------------
 ## Linter Targets
 ## --------------------------------------
diff --git a/config/overlays/e2e-release-0.4/ironic.env b/config/overlays/e2e-release-0.4/ironic.env
new file mode 100644
index 0000000000..2332d5778c
--- /dev/null
+++ b/config/overlays/e2e-release-0.4/ironic.env
@@ -0,0 +1,9 @@
+HTTP_PORT=6180
+PROVISIONING_IP=192.168.222.199
+DEPLOY_KERNEL_URL=http://192.168.222.199:6180/images/ironic-python-agent.kernel
+DEPLOY_RAMDISK_URL=http://192.168.222.199:6180/images/ironic-python-agent.initramfs
+IRONIC_ENDPOINT=http://192.168.222.199:6385/v1/
+CACHEURL=http://192.168.222.199/images
+IRONIC_FAST_TRACK=true
+IRONIC_KERNEL_PARAMS=console=ttyS0
+IRONIC_INSPECTOR_VLAN_INTERFACES=all
diff --git a/config/overlays/e2e-release-0.4/kustomization.yaml b/config/overlays/e2e-release-0.4/kustomization.yaml
new file mode 100644
index 0000000000..07fecf4929
--- /dev/null
+++ b/config/overlays/e2e-release-0.4/kustomization.yaml
@@ -0,0 +1,26 @@
+apiVersion: kustomize.config.k8s.io/v1beta1
+kind: Kustomization
+
+resources:
+- https://github.com/metal3-io/baremetal-operator/config/namespace?ref=release-0.4
+- https://github.com/metal3-io/baremetal-operator/config/default?ref=release-0.4
+
+configMapGenerator:
+- behavior: replace
+  envs:
+  - ironic.env
+  name: ironic
+
+patches:
+- patch: |
+    # Don't try to pull again the pre-loaded image
+    - op: replace
+      path: /spec/template/spec/containers/0/imagePullPolicy
+      value: IfNotPresent
+  target:
+    kind: Deployment
+    name: controller-manager
+
+images:
+- name: quay.io/metal3-io/baremetal-operator
+  newTag: release-0.4
diff --git a/config/overlays/fixture-release-0.4/kustomization.yaml b/config/overlays/fixture-release-0.4/kustomization.yaml
new file mode 100644
index 0000000000..559c0097e7
--- /dev/null
+++ b/config/overlays/fixture-release-0.4/kustomization.yaml
@@ -0,0 +1,24 @@
+apiVersion: kustomize.config.k8s.io/v1beta1
+kind: Kustomization
+
+resources:
+- https://github.com/metal3-io/baremetal-operator/config/namespace?ref=release-0.4
+- https://github.com/metal3-io/baremetal-operator/config/default?ref=release-0.4
+
+patches:
+- patch: |
+    # Enable test mode (fixture provider instead of ironic)
+    - op: add
+      path: /spec/template/spec/containers/0/args/-
+      value: --test-mode
+    # Don't try to pull again the pre-loaded image
+    - op: replace
+      path: /spec/template/spec/containers/0/imagePullPolicy
+      value: IfNotPresent
+  target:
+    kind: Deployment
+    name: controller-manager
+
+images:
+- name: quay.io/metal3-io/baremetal-operator
+  newTag: release-0.4
diff --git a/hack/ci-e2e.sh b/hack/ci-e2e.sh
index 9bd9ac2789..57254b8422 100755
--- a/hack/ci-e2e.sh
+++ b/hack/ci-e2e.sh
@@ -11,6 +11,7 @@
 set -eux
 
 REPO_ROOT=$(realpath "$(dirname "${BASH_SOURCE[0]}")/..")
+BMO_IMAGE="quay.io/metal3-io/baremetal-operator:e2e"
 
 cd "${REPO_ROOT}" || exit 1
 
@@ -25,24 +26,35 @@ export PATH="${PATH}:/usr/local/go/bin"
 "${REPO_ROOT}/hack/e2e/ensure_kubectl.sh"
 
 # Build the container image with e2e tag (used in tests)
-IMG=quay.io/metal3-io/baremetal-operator:e2e make docker
-
-# Set up minikube
-minikube start --driver=kvm2
+IMG="${BMO_IMAGE}" make docker
 
 virsh -c qemu:///system net-define "${REPO_ROOT}/hack/e2e/net.xml"
 virsh -c qemu:///system net-start baremetal-e2e
-# Attach baremetal-e2e interface to minikube with specific mac.
-# This will give minikube a known reserved IP address that we can use for Ironic
-virsh -c qemu:///system attach-interface --domain minikube --mac="52:54:00:6c:3c:01" \
-  --model virtio --source baremetal-e2e --type network --config
 
-# Restart minikube to apply the changes
-minikube stop
-minikube start
+# kubeconfigs=("${HOME}/.kube/config" "/tmp/kubeconfig-bmo-e2e-upgrade")
+profiles=("bmo-e2e" "bmo-e2e-upgrade")
+
+# Set up minikube
+for profile in "${profiles[@]}"; do
+  # export KUBECONFIG="${kubeconfigs[$index]}"
+  minikube start --profile "${profile}" --driver=kvm2
+
+  # Attach baremetal-e2e interface to minikube with specific mac.
+  # This will give minikube a known reserved IP address that we can use for Ironic
+  random_mac=$(hexdump -n 6 -ve '1/1 "%.2x "' /dev/random | awk -v a="2,6,a,e" -v r="$RANDOM" 'BEGIN{srand(r);}NR==1{split(a,b,",");r=int(rand()*4+1);printf "%s%s:%s:%s:%s:%s:%s\n",substr($1,0,1),b[r],$2,$3,$4,$5,$6}')
+  virsh -c qemu:///system attach-interface --domain "${profile}" --mac="${random_mac}" \
+    --model virtio --source baremetal-e2e --type network --config
+
+  # Restart minikube to apply the changes
+  minikube stop --profile "${profile}"
+  minikube start --profile "${profile}"
+
+  # Load the local BMO image into it
+  minikube --profile "${profile}" image load "${BMO_IMAGE}"
+done
 
-# Load the BMO e2e image into it
-minikube image load quay.io/metal3-io/baremetal-operator:e2e
+# export KUBECONFIG="${kubeconfigs[0]}"
+# export KUBECONFIG_E2E_UPGRADE="${kubeconfigs[1]}"
 
 # Create libvirt domain
 VM_NAME="bmo-e2e-0"
@@ -126,6 +138,8 @@ docker run --name image-server-e2e -d \
 set +e
 
 # Run the e2e tests
+export E2E_CONF_FILE="${REPO_ROOT}/test/e2e/config/ironic.yaml"
+export USE_EXISTING_CLUSTER="true"
 make test-e2e
 test_status="$?"
 
diff --git a/hack/clean-e2e.sh b/hack/clean-e2e.sh
index 75c4a597e4..ce74d16d63 100755
--- a/hack/clean-e2e.sh
+++ b/hack/clean-e2e.sh
@@ -3,7 +3,8 @@
 REPO_ROOT=$(dirname "${BASH_SOURCE[0]}")/..
 cd "${REPO_ROOT}" || exit 1
 
-minikube delete
+minikube delete --profile bmo-e2e
+minikube delete --profile bmo-e2e-upgrade
 docker rm -f vbmc
 docker rm -f image-server-e2e
 docker rm -f sushy-tools
diff --git a/test/e2e/common.go b/test/e2e/common.go
index 3913d57629..acaade8652 100644
--- a/test/e2e/common.go
+++ b/test/e2e/common.go
@@ -16,6 +16,7 @@ import (
 	corev1 "k8s.io/api/core/v1"
 	apierrors "k8s.io/apimachinery/pkg/api/errors"
 	metav1 "k8s.io/apimachinery/pkg/apis/meta/v1"
+	"k8s.io/client-go/tools/clientcmd"
 
 	metal3api "github.com/metal3-io/baremetal-operator/apis/metal3.io/v1alpha1"
 
@@ -296,3 +297,41 @@ func CreateBMHCredentialsSecret(ctx context.Context, client client.Client, secre
 
 	return nil
 }
+
+func DeploymentRolledOut(ctx context.Context, clusterProxy framework.ClusterProxy, name string, namespace string, desiredGeneration int64) bool {
+	clientSet := clusterProxy.GetClientSet()
+	deploy, err := clientSet.AppsV1().Deployments(namespace).Get(ctx, name, metav1.GetOptions{})
+	Expect(err).To(BeNil())
+	if deploy != nil {
+		// When the number of replicas is equal to the number of available and updated
+		// replicas, we know that only "new" pods are running. When we also
+		// have the desired number of replicas and a new enough generation, we
+		// know that the rollout is complete.
+		return (deploy.Status.UpdatedReplicas == *deploy.Spec.Replicas) &&
+			(deploy.Status.AvailableReplicas == *deploy.Spec.Replicas) &&
+			(deploy.Status.Replicas == *deploy.Spec.Replicas) &&
+			(deploy.Status.ObservedGeneration >= desiredGeneration)
+	}
+	return false
+}
+
+func SwitchKubeconfigContext(kubeConfigFile, contextName string) error {
+	config, err := clientcmd.LoadFromFile(kubeConfigFile)
+	if err != nil {
+		return err
+	}
+
+	_, exists := config.Contexts[contextName]
+	if !exists {
+		return errors.New(fmt.Sprintf("Context %s not existed in kubeconfig file %s", contextName, kubeConfigFile))
+	}
+
+	config.CurrentContext = contextName
+
+	err = clientcmd.WriteToFile(*config, kubeConfigFile)
+	if err != nil {
+		return err
+	}
+
+	return nil
+}
diff --git a/test/e2e/config/fixture.yaml b/test/e2e/config/fixture.yaml
index ac5507c672..c42d735536 100644
--- a/test/e2e/config/fixture.yaml
+++ b/test/e2e/config/fixture.yaml
@@ -15,6 +15,8 @@ variables:
   DEPLOY_BMO: "true"
   DEPLOY_CERT_MANAGER: "true"
   BMO_KUSTOMIZATION: "../../config/overlays/fixture"
+  BMO_RELEASE_BRANCH: "release-0.4"
+  BMO_UPGRADE_FROM_KUSTOMIZATION: "../../config/overlays/fixture-release-0.4"
   EXPECTED_HOST_NAME: ""
   # Test credentials. The tests will create a BMH with these.
   # For the fixture provider it does not matter much what we put here.
diff --git a/test/e2e/config/ironic.yaml b/test/e2e/config/ironic.yaml
index 7c930b76f0..84cda4c1d5 100644
--- a/test/e2e/config/ironic.yaml
+++ b/test/e2e/config/ironic.yaml
@@ -18,6 +18,8 @@ variables:
   DEPLOY_BMO: "true"
   DEPLOY_CERT_MANAGER: "true"
   BMO_KUSTOMIZATION: "../../config/overlays/e2e"
+  BMO_UPGRADE_FROM_KUSTOMIZATION: "../../config/overlays/e2e-release-0.4"
+  BMO_RELEASE_BRANCH: "release-0.4"
   IRONIC_KUSTOMIZATION: "../../ironic-deployment/overlays/e2e"
   EXPECTED_HOST_NAME: "localhost.localdomain"
   # Test credentials. The tests will create a BMH with these.
@@ -49,3 +51,5 @@ intervals:
   default/wait-deprovisioning: ["1m", "10ms"]
   default/wait-deleted: ["20s", "10ms"]
   default/wait-secret-deletion: ["1m", "1s"]
+  upgrade/wait-provisioning: ["1m", "1s"]
+  upgrade/wait-provisioned: ["10m", "1s"]
diff --git a/test/e2e/e2e_suite_test.go b/test/e2e/e2e_suite_test.go
index d054d8c8e3..56fc7d816a 100644
--- a/test/e2e/e2e_suite_test.go
+++ b/test/e2e/e2e_suite_test.go
@@ -77,6 +77,8 @@ var _ = SynchronizedBeforeSuite(func() []byte {
 		if kubeconfigPath == "" {
 			kubeconfigPath = os.Getenv("HOME") + "/.kube/config"
 		}
+		err := SwitchKubeconfigContext(kubeconfigPath, "bmo-e2e")
+		Expect(err).NotTo(HaveOccurred())
 	} else {
 		clusterProvider = bootstrap.CreateKindBootstrapClusterAndLoadImages(ctx, bootstrap.CreateKindBootstrapClusterAndLoadImagesInput{
 			Name:   "bmo-e2e",
@@ -89,6 +91,7 @@ var _ = SynchronizedBeforeSuite(func() []byte {
 
 	scheme := runtime.NewScheme()
 	framework.TryAddDefaultSchemes(scheme)
+
 	clusterProxy := framework.NewClusterProxy("bmo-e2e", kubeconfigPath, scheme)
 	Expect(clusterProxy).ToNot(BeNil(), "Failed to get a cluster proxy")
 
diff --git a/test/e2e/upgrade_test.go b/test/e2e/upgrade_test.go
new file mode 100644
index 0000000000..5a9fe3f42d
--- /dev/null
+++ b/test/e2e/upgrade_test.go
@@ -0,0 +1,402 @@
+package e2e
+
+import (
+	"fmt"
+	"os"
+	"path/filepath"
+
+	. "github.com/onsi/ginkgo/v2"
+	. "github.com/onsi/gomega"
+	v1 "k8s.io/api/apps/v1"
+	corev1 "k8s.io/api/core/v1"
+	metav1 "k8s.io/apimachinery/pkg/apis/meta/v1"
+	"k8s.io/apimachinery/pkg/runtime"
+	"sigs.k8s.io/cluster-api/test/framework"
+	"sigs.k8s.io/cluster-api/test/framework/bootstrap"
+	"sigs.k8s.io/cluster-api/test/framework/clusterctl"
+	"sigs.k8s.io/cluster-api/util"
+	"sigs.k8s.io/cluster-api/util/patch"
+
+	metal3api "github.com/metal3-io/baremetal-operator/apis/metal3.io/v1alpha1"
+)
+
+const hardwareDetailsRelease04 = `
+{
+  "cpu": {
+    "arch": "x86_64",
+    "count": 2,
+    "flags": [
+      "3dnowprefetch",
+      "abm",
+      "adx",
+      "aes",
+      "apic",
+      "arat",
+      "arch_capabilities",
+      "avx",
+      "avx2",
+      "avx_vnni",
+      "bmi1",
+      "bmi2",
+      "clflush",
+      "clflushopt",
+      "clwb",
+      "cmov",
+      "constant_tsc",
+      "cpuid",
+      "cpuid_fault",
+      "cx16",
+      "cx8",
+      "de",
+      "ept",
+      "ept_ad",
+      "erms",
+      "f16c",
+      "flexpriority",
+      "fma",
+      "fpu",
+      "fsgsbase",
+      "fsrm",
+      "fxsr",
+      "gfni",
+      "hypervisor",
+      "ibpb",
+      "ibrs",
+      "ibrs_enhanced",
+      "invpcid",
+      "lahf_lm",
+      "lm",
+      "mca",
+      "mce",
+      "md_clear",
+      "mmx",
+      "movbe",
+      "movdir64b",
+      "movdiri",
+      "msr",
+      "mtrr",
+      "nopl",
+      "nx",
+      "ospke",
+      "pae",
+      "pat",
+      "pclmulqdq",
+      "pdpe1gb",
+      "pge",
+      "pku",
+      "pni",
+      "popcnt",
+      "pse",
+      "pse36",
+      "rdpid",
+      "rdrand",
+      "rdseed",
+      "rdtscp",
+      "rep_good",
+      "sep",
+      "serialize",
+      "sha_ni",
+      "smap",
+      "smep",
+      "ss",
+      "ssbd",
+      "sse",
+      "sse2",
+      "sse4_1",
+      "sse4_2",
+      "ssse3",
+      "stibp",
+      "syscall",
+      "tpr_shadow",
+      "tsc",
+      "tsc_adjust",
+      "tsc_deadline_timer",
+      "tsc_known_freq",
+      "umip",
+      "vaes",
+      "vme",
+      "vmx",
+      "vnmi",
+      "vpclmulqdq",
+      "vpid",
+      "waitpkg",
+      "x2apic",
+      "xgetbv1",
+      "xsave",
+      "xsavec",
+      "xsaveopt",
+      "xsaves",
+      "xtopology"
+    ],
+    "model": "12th Gen Intel(R) Core(TM) i9-12900H"
+  },
+  "firmware": {
+    "bios": {
+      "date": "04/01/2014",
+      "vendor": "SeaBIOS",
+      "version": "1.15.0-1"
+    }
+  },
+  "hostname": "localhost.localdomain",
+  "nics": [
+    {
+      "ip": "192.168.222.122",
+      "mac": "00:60:2f:31:81:01",
+      "model": "0x1af4 0x0001",
+      "name": "enp1s0",
+      "pxe": true
+    },
+    {
+      "ip": "fe80::570a:edf2:a3a7:4eb8%enp1s0",
+      "mac": "00:60:2f:31:81:01",
+      "model": "0x1af4 0x0001",
+      "name": "enp1s0",
+      "pxe": true
+    }
+  ],
+  "ramMebibytes": 4096,
+  "storage": [
+    {
+      "name": "/dev/disk/by-path/pci-0000:04:00.0",
+      "rotational": true,
+      "sizeBytes": 21474836480,
+      "type": "HDD",
+      "vendor": "0x1af4"
+    }
+  ],
+  "systemVendor": {
+    "manufacturer": "QEMU",
+    "productName": "Standard PC (Q35 + ICH9, 2009)"
+  }
+}
+`
+
+var _ = Describe("BMO Upgrade", func() {
+	var (
+		specName               = "upgrade"
+		namespace              *corev1.Namespace
+		bmoNamespace           string
+		bmoDeployName          string
+		bmoReleaseBranch       string
+		bmcUser                string
+		bmcPassword            string
+		bmcAddress             string
+		bootMacAddress         string
+		bmoKustomization       string
+		upgradeClusterProvider bootstrap.ClusterProvider
+		upgradeClusterProxy    framework.ClusterProxy
+		bmh                    metal3api.BareMetalHost
+	)
+	BeforeEach(func() {
+		bmcUser = e2eConfig.GetVariable("BMC_USER")
+		bmcPassword = e2eConfig.GetVariable("BMC_PASSWORD")
+		bmcAddress = e2eConfig.GetVariable("BMC_ADDRESS")
+		bootMacAddress = e2eConfig.GetVariable("BOOT_MAC_ADDRESS")
+		bmoNamespace = "baremetal-operator-system"
+		bmoDeployName = "baremetal-operator-controller-manager"
+		bmoReleaseBranch = e2eConfig.GetVariable("BMO_RELEASE_BRANCH")
+		bmoUpgradeFromImageName := fmt.Sprintf("quay.io/metal3-io/baremetal-operator:%s", bmoReleaseBranch)
+		bmoKustomization = e2eConfig.GetVariable("BMO_KUSTOMIZATION")
+		bmoUpgradeFromKustomization := e2eConfig.GetVariable("BMO_UPGRADE_FROM_KUSTOMIZATION")
+
+		bmoUpgradeFromImage := clusterctl.ContainerImage{
+			Name:         bmoUpgradeFromImageName,
+			LoadBehavior: clusterctl.MustLoadImage,
+		}
+
+		By("Creating a separate cluster for upgrade tests")
+		var kubeconfigPath string
+		if useExistingCluster {
+			kubeconfigPath = os.Getenv("KUBECONFIG")
+			if kubeconfigPath == "" {
+				kubeconfigPath = os.Getenv("HOME") + "/.kube/config"
+			}
+			err := SwitchKubeconfigContext(kubeconfigPath, "bmo-e2e-upgrade")
+			Expect(err).NotTo(HaveOccurred())
+		} else {
+			upgradeClusterProvider = bootstrap.CreateKindBootstrapClusterAndLoadImages(ctx, bootstrap.CreateKindBootstrapClusterAndLoadImagesInput{
+				Name:   "bmo-e2e-upgrade",
+				Images: append(e2eConfig.Images, bmoUpgradeFromImage),
+			})
+			Expect(upgradeClusterProvider).ToNot(BeNil(), "Failed to create a cluster")
+			kubeconfigPath = clusterProvider.GetKubeconfigPath()
+		}
+		Expect(kubeconfigPath).To(BeAnExistingFile(), "Failed to get the kubeconfig file for the cluster")
+		scheme := runtime.NewScheme()
+		framework.TryAddDefaultSchemes(scheme)
+		metal3api.AddToScheme(scheme)
+		upgradeClusterProxy = framework.NewClusterProxy("bmo-e2e-upgrade", kubeconfigPath, scheme)
+		By("Installing cert-manager on the upgrade cluster")
+		cmVersion := e2eConfig.GetVariable("CERT_MANAGER_VERSION")
+		err := installCertManager(ctx, upgradeClusterProxy, cmVersion)
+		Expect(err).NotTo(HaveOccurred())
+		By("Waiting for cert-manager webhook")
+		Eventually(func() error {
+			return checkCertManagerWebhook(ctx, upgradeClusterProxy)
+		}, e2eConfig.GetIntervals("default", "wait-available")...).Should(Succeed())
+		err = checkCertManagerAPI(upgradeClusterProxy)
+		Expect(err).NotTo(HaveOccurred())
+
+		By("Installing BMO on the upgrade cluster")
+		manifest, err := buildKustomizeManifest(bmoUpgradeFromKustomization)
+		Expect(err).NotTo(HaveOccurred())
+		err = upgradeClusterProxy.Apply(ctx, manifest)
+		Expect(err).NotTo(HaveOccurred())
+
+		bmoDeployment := &v1.Deployment{
+			ObjectMeta: metav1.ObjectMeta{
+				Name:      "baremetal-operator-controller-manager",
+				Namespace: "baremetal-operator-system",
+			},
+		}
+		// Wait for it to become available
+		framework.WaitForDeploymentsAvailable(ctx, framework.WaitForDeploymentsAvailableInput{
+			Getter:     upgradeClusterProxy.GetClient(),
+			Deployment: bmoDeployment,
+		}, e2eConfig.GetIntervals("default", "wait-deployment")...)
+		// Set up log watcher
+		framework.WatchDeploymentLogsByName(ctx, framework.WatchDeploymentLogsByNameInput{
+			GetLister:  upgradeClusterProxy.GetClient(),
+			Cache:      upgradeClusterProxy.GetCache(ctx),
+			ClientSet:  upgradeClusterProxy.GetClientSet(),
+			Deployment: bmoDeployment,
+			LogPath:    filepath.Join(artifactFolder, "logs", bmoDeployment.GetNamespace()),
+		})
+
+		if e2eConfig.GetVariable("DEPLOY_IRONIC") != "false" {
+			// Install Ironic
+			By("Installing Ironic on the upgrade cluster")
+			ironicKustomization := e2eConfig.GetVariable("IRONIC_KUSTOMIZATION")
+			ironicManifest, err := buildKustomizeManifest(ironicKustomization)
+			Expect(err).NotTo(HaveOccurred())
+			err = upgradeClusterProxy.Apply(ctx, ironicManifest)
+			Expect(err).NotTo(HaveOccurred())
+
+			ironicDeployment := &v1.Deployment{
+				ObjectMeta: metav1.ObjectMeta{
+					Name:      "baremetal-operator-ironic",
+					Namespace: "baremetal-operator-system",
+				},
+			}
+			// Wait for it to become available
+			framework.WaitForDeploymentsAvailable(ctx, framework.WaitForDeploymentsAvailableInput{
+				Getter:     upgradeClusterProxy.GetClient(),
+				Deployment: ironicDeployment,
+			}, e2eConfig.GetIntervals("ironic", "wait-deployment")...)
+			// Set up log watcher
+			framework.WatchDeploymentLogsByName(ctx, framework.WatchDeploymentLogsByNameInput{
+				GetLister:  upgradeClusterProxy.GetClient(),
+				Cache:      upgradeClusterProxy.GetCache(ctx),
+				ClientSet:  upgradeClusterProxy.GetClientSet(),
+				Deployment: ironicDeployment,
+				LogPath:    filepath.Join(artifactFolder, "logs", ironicDeployment.GetNamespace()),
+			})
+			namespace, cancelWatches = framework.CreateNamespaceAndWatchEvents(ctx, framework.CreateNamespaceAndWatchEventsInput{
+				Creator:   upgradeClusterProxy.GetClient(),
+				ClientSet: upgradeClusterProxy.GetClientSet(),
+				Name:      fmt.Sprintf("%s-%s", specName, util.RandomString(6)),
+				LogFolder: artifactFolder,
+			})
+		}
+	})
+
+	It("Should upgrade BMO to latest version", func() {
+		By("Creating a secret with BMH credentials")
+		bmcCredentials := corev1.Secret{
+			ObjectMeta: metav1.ObjectMeta{
+				Name:      "bmc-credentials",
+				Namespace: namespace.Name,
+			},
+			StringData: map[string]string{
+				"username": bmcUser,
+				"password": bmcPassword,
+			},
+		}
+		err := upgradeClusterProxy.GetClient().Create(ctx, &bmcCredentials)
+		Expect(err).NotTo(HaveOccurred())
+
+		By("Creating a BMH with inspection disabled and hardware details added")
+		bmh = metal3api.BareMetalHost{
+			ObjectMeta: metav1.ObjectMeta{
+				Name:      specName,
+				Namespace: namespace.Name,
+				Annotations: map[string]string{
+					metal3api.InspectAnnotationPrefix:   "disabled",
+					metal3api.HardwareDetailsAnnotation: hardwareDetailsRelease04,
+				},
+			},
+			Spec: metal3api.BareMetalHostSpec{
+				Online: true,
+				BMC: metal3api.BMCDetails{
+					Address:         bmcAddress,
+					CredentialsName: "bmc-credentials",
+				},
+				BootMode:       metal3api.Legacy,
+				BootMACAddress: bootMacAddress,
+			},
+		}
+		err = upgradeClusterProxy.GetClient().Create(ctx, &bmh)
+		Expect(err).NotTo(HaveOccurred())
+
+		By("Waiting for the BMH to become available")
+		WaitForBmhInProvisioningState(ctx, WaitForBmhInProvisioningStateInput{
+			Client: upgradeClusterProxy.GetClient(),
+			Bmh:    bmh,
+			State:  metal3api.StateAvailable,
+		}, e2eConfig.GetIntervals(specName, "wait-available")...)
+
+		By("Upgrading BMO deployment")
+		clientSet := upgradeClusterProxy.GetClientSet()
+		deploy, err := clientSet.AppsV1().Deployments(bmoNamespace).Get(ctx, bmoDeployName, metav1.GetOptions{})
+		Expect(err).NotTo(HaveOccurred())
+		manifest, err := buildKustomizeManifest(bmoKustomization)
+		Expect(err).NotTo(HaveOccurred())
+		err = upgradeClusterProxy.Apply(ctx, manifest)
+		Expect(err).NotTo(HaveOccurred())
+		By("Waiting for BMO update to rollout")
+		Eventually(func() bool {
+			return DeploymentRolledOut(ctx, upgradeClusterProxy, bmoDeployName, bmoNamespace, deploy.Status.ObservedGeneration+1)
+		},
+			e2eConfig.GetIntervals("default", "wait-deployment")...,
+		).Should(BeTrue())
+		By("Patching the BMH to test provisioning")
+		helper, err := patch.NewHelper(&bmh, upgradeClusterProxy.GetClient())
+		Expect(err).NotTo(HaveOccurred())
+		bmh.ObjectMeta.Annotations[metal3api.HardwareDetailsAnnotation] = hardwareDetails
+		bmh.Spec.Image = &metal3api.Image{
+			URL:      e2eConfig.GetVariable("IMAGE_URL"),
+			Checksum: e2eConfig.GetVariable("IMAGE_CHECKSUM"),
+		}
+		bmh.Spec.RootDeviceHints = &metal3api.RootDeviceHints{
+			DeviceName: "/dev/vda",
+		}
+		Expect(helper.Patch(ctx, &bmh)).To(Succeed())
+
+		By("Waiting for the BMH to be in provisioning state")
+		WaitForBmhInProvisioningState(ctx, WaitForBmhInProvisioningStateInput{
+			Client: upgradeClusterProxy.GetClient(),
+			Bmh:    bmh,
+			State:  metal3api.StateProvisioning,
+		}, e2eConfig.GetIntervals(specName, "wait-provisioning")...)
+
+		By("Waiting for the BMH to become provisioned")
+		WaitForBmhInProvisioningState(ctx, WaitForBmhInProvisioningStateInput{
+			Client: upgradeClusterProxy.GetClient(),
+			Bmh:    bmh,
+			State:  metal3api.StateProvisioned,
+		}, e2eConfig.GetIntervals(specName, "wait-provisioned")...)
+	})
+
+	AfterEach(func() {
+		cancelWatches()
+		if !skipCleanup {
+			if upgradeClusterProxy != nil {
+				upgradeClusterProxy.Dispose(ctx)
+			}
+			if upgradeClusterProvider != nil {
+				upgradeClusterProvider.Dispose(ctx)
+			}
+		}
+	})
+
+})