diff --git a/vmware-base/src/com/cloud/hypervisor/vmware/mo/HypervisorHostHelper.java b/vmware-base/src/com/cloud/hypervisor/vmware/mo/HypervisorHostHelper.java
index 77f6b795af4..77862d118bf 100755
--- a/vmware-base/src/com/cloud/hypervisor/vmware/mo/HypervisorHostHelper.java
+++ b/vmware-base/src/com/cloud/hypervisor/vmware/mo/HypervisorHostHelper.java
@@ -999,6 +999,7 @@ public class HypervisorHostHelper {
 			s_logger.error(msg);
 			throw new Exception(msg);
 		}
+        boolean importSuccess = true;
 		final HttpNfcLeaseMO leaseMo = new HttpNfcLeaseMO(context, morLease);
 		HttpNfcLeaseState state = leaseMo.waitState(
 			new HttpNfcLeaseState[] { HttpNfcLeaseState.ready, HttpNfcLeaseState.error });
@@ -1032,13 +1033,25 @@ public class HypervisorHostHelper {
 		        			 }  
 			        	 }  
 			        }
-		        } finally {
-		        	progressReporter.close();
-		        }
-		        leaseMo.updateLeaseProgress(100);
-			}
-		} finally {
-			leaseMo.completeLease();
+                } catch (Exception e) {
+                    s_logger.error("Failed to complete file upload task. " + e.getMessage());
+                    // Set flag to cleanup the stale template left due to failed import operation, if any
+                    importSuccess = false;
+                    throw e;
+                } finally {
+                    progressReporter.close();
+                }
+                if (bytesAlreadyWritten == totalBytes) {
+                    leaseMo.updateLeaseProgress(100);
+                }
+            }
+        } finally {
+            if (!importSuccess) {
+                s_logger.error("Aborting the lease on " + vmName + " after import operation failed.");
+                leaseMo.abortLease();
+            } else {
+                leaseMo.completeLease();
+            }
 		}
 	}
 }