diff --git a/lib/vdsm/storage/blockVolume.py b/lib/vdsm/storage/blockVolume.py
index 15ddb14a59..149926221a 100644
--- a/lib/vdsm/storage/blockVolume.py
+++ b/lib/vdsm/storage/blockVolume.py
@@ -718,7 +718,7 @@ def setParentTag(self, puuid):
     def getMetaSlot(self):
         return self._manifest.getMetaSlot()
 
-    def _extendSizeRaw(self, new_capacity):
+    def _extendSize(self, new_capacity):
         # Since this method relies on lvm.extendLV (lvextend) when the
         # requested size is equal or smaller than the current size, the
         # request is siliently ignored.
diff --git a/lib/vdsm/storage/fileVolume.py b/lib/vdsm/storage/fileVolume.py
index 8be37d903e..960b50f1f8 100644
--- a/lib/vdsm/storage/fileVolume.py
+++ b/lib/vdsm/storage/fileVolume.py
@@ -734,7 +734,7 @@ def getLeaseVolumePath(self, vol_path=None):
         # pylint: disable=no-member
         return self._manifest.getLeaseVolumePath(vol_path)
 
-    def _extendSizeRaw(self, new_capacity):
+    def _extendSize(self, new_capacity):
         volPath = self.getVolumePath()
         cur_capacity = self.oop.os.stat(volPath).st_size
 
diff --git a/lib/vdsm/storage/volume.py b/lib/vdsm/storage/volume.py
index dfe0c2c824..3f930ec62f 100644
--- a/lib/vdsm/storage/volume.py
+++ b/lib/vdsm/storage/volume.py
@@ -1381,11 +1381,11 @@ def extendSize(self, new_capacity):
             raise se.VolumeNonWritable(self.volUUID)
 
         volFormat = self.getFormat()
-        if volFormat == sc.COW_FORMAT:
+        if volFormat == sc.COW_FORMAT and self.getType() == sc.SPARSE_VOL:
             self.log.debug("skipping cow size extension for volume %s to "
                            "capacity %s", self.volUUID, new_capacity)
             return
-        elif volFormat != sc.RAW_FORMAT:
+        if volFormat not in [sc.RAW_FORMAT, sc.COW_FORMAT]:
             raise se.IncorrectFormat(self.volUUID)
 
         # Note: This function previously prohibited extending non-leaf volumes.
@@ -1416,7 +1416,7 @@ def extendSize(self, new_capacity):
                 "Extend size for volume: " + self.volUUID, "volume",
                 "Volume", "extendSizeFinalize",
                 [self.sdUUID, self.imgUUID, self.volUUID]))
-            self._extendSizeRaw(new_capacity)
+            self._extendSize(new_capacity)
 
         self.syncMetadata()  # update the metadata
 
@@ -1594,7 +1594,7 @@ def newVolumeLease(cls, metaId, sdUUID, volUUID):
     def getImageVolumes(cls, sdUUID, imgUUID):
         return cls.manifestClass.getImageVolumes(sdUUID, imgUUID)
 
-    def _extendSizeRaw(self, newSize):
+    def _extendSize(self, newSize):
         raise NotImplementedError
 
     # Used only for block volume
diff --git a/tests/storage/blocksd_test.py b/tests/storage/blocksd_test.py
index e3fb933e0d..7f1176b41b 100644
--- a/tests/storage/blocksd_test.py
+++ b/tests/storage/blocksd_test.py
@@ -1857,6 +1857,84 @@ def test_reduce_volume_skipped(domain_factory, fake_task, fake_sanlock):
     assert dom.getVolumeSize(img_uuid, vol_id).apparentsize == vol_capacity
 
 
+@requires_root
+@pytest.mark.root
+def test_extend_volume(domain_factory, fake_task, fake_sanlock):
+    """
+    Test added to verify fix for https://bugzilla.redhat.com/2170689.
+    COW preallocated volumes should be extended when demanded. Otherwise,
+    VMs on preallocated disks will pause when reaching the volume truesize.
+
+    To avoid slowness of creating loop devices and storage domains for every
+    test, avoid parametrized test, just create as many volumes as needed
+    to test, and check them in one execution.
+    """
+    vol_formats = [
+        sc.COW_FORMAT,
+        sc.RAW_FORMAT
+    ]
+    sd_uuid = str(uuid.uuid4())
+    dom = domain_factory.create_domain(sd_uuid=sd_uuid, version=5)
+
+    img_uuid = str(uuid.uuid4())
+    vol_info = [(str(uuid.uuid4()), fmt) for fmt in vol_formats]
+    vol_capacity = 3 * GiB
+    new_capacity = 5 * GiB
+
+    for vol_uuid, vol_format in vol_info:
+        dom.createVolume(
+            imgUUID=img_uuid,
+            capacity=vol_capacity,
+            volFormat=vol_format,
+            preallocate=sc.PREALLOCATED_VOL,
+            diskType=sc.DATA_DISKTYPE,
+            volUUID=vol_uuid,
+            desc="Base volume",
+            srcImgUUID=sc.BLANK_UUID,
+            srcVolUUID=sc.BLANK_UUID)
+
+        # Produce and extend volume to the new capacity.
+        vol = dom.produceVolume(img_uuid, vol_uuid)
+        vol.extendSize(new_capacity)
+
+        # Check that volume size has changed.
+        vol_size = dom.getVolumeSize(img_uuid, vol_uuid)
+        assert vol_size.truesize == new_capacity
+        assert vol_size.apparentsize == new_capacity
+
+
+@requires_root
+@pytest.mark.root
+def test_extend_volume_skipped(domain_factory, fake_task, fake_sanlock):
+    sd_uuid = str(uuid.uuid4())
+    dom = domain_factory.create_domain(sd_uuid=sd_uuid, version=5)
+
+    img_uuid = str(uuid.uuid4())
+    vol_id = str(uuid.uuid4())
+    vol_capacity = 10 * GiB
+    new_capacity = 15 * GiB
+
+    dom.createVolume(
+        imgUUID=img_uuid,
+        capacity=vol_capacity,
+        volFormat=sc.COW_FORMAT,
+        preallocate=sc.SPARSE_VOL,
+        diskType=sc.DATA_DISKTYPE,
+        volUUID=vol_id,
+        desc="Base volume",
+        srcImgUUID=sc.BLANK_UUID,
+        srcVolUUID=sc.BLANK_UUID)
+
+    # Produce and extend volume to the new capacity, but we skip extends for
+    # cow sparse volumes.
+    vol = dom.produceVolume(img_uuid, vol_id)
+    vol.extendSize(new_capacity)
+
+    # Check that volume size has not changed.
+    assert dom.getVolumeSize(img_uuid, vol_id).truesize <= vol_capacity
+    assert dom.getVolumeSize(img_uuid, vol_id).apparentsize <= vol_capacity
+
+
 LVM_TAG_CHARS = string.ascii_letters + "0123456789_+.-/=!:#"
 
 LVM_TAGS = [