diff --git a/engine/api/src/main/java/org/apache/cloudstack/engine/orchestration/service/VolumeOrchestrationService.java b/engine/api/src/main/java/org/apache/cloudstack/engine/orchestration/service/VolumeOrchestrationService.java
index 814091bf3ae..c3525466ce1 100644
--- a/engine/api/src/main/java/org/apache/cloudstack/engine/orchestration/service/VolumeOrchestrationService.java
+++ b/engine/api/src/main/java/org/apache/cloudstack/engine/orchestration/service/VolumeOrchestrationService.java
@@ -85,7 +85,7 @@ public interface VolumeOrchestrationService {
     VolumeInfo moveVolume(VolumeInfo volume, long destPoolDcId, Long destPoolPodId, Long destPoolClusterId, HypervisorType dataDiskHyperType)
         throws ConcurrentOperationException, StorageUnavailableException;
 
-    Volume allocateDuplicateVolume(Volume oldVol, Long templateId);
+    Volume allocateDuplicateVolume(Volume oldVol, DiskOffering diskOffering, Long templateId);
 
     boolean volumeOnSharedStoragePool(Volume volume);
 
diff --git a/engine/orchestration/src/main/java/org/apache/cloudstack/engine/orchestration/VolumeOrchestrator.java b/engine/orchestration/src/main/java/org/apache/cloudstack/engine/orchestration/VolumeOrchestrator.java
index 22406292ce1..565c3f2101a 100644
--- a/engine/orchestration/src/main/java/org/apache/cloudstack/engine/orchestration/VolumeOrchestrator.java
+++ b/engine/orchestration/src/main/java/org/apache/cloudstack/engine/orchestration/VolumeOrchestrator.java
@@ -305,11 +305,11 @@ public class VolumeOrchestrator extends ManagerBase implements VolumeOrchestrati
     }
 
     @Override
-    public Volume allocateDuplicateVolume(Volume oldVol, Long templateId) {
-        return allocateDuplicateVolumeVO(oldVol, templateId);
+    public Volume allocateDuplicateVolume(Volume oldVol, DiskOffering diskOffering, Long templateId) {
+        return allocateDuplicateVolumeVO(oldVol, diskOffering, templateId);
     }
 
-    public VolumeVO allocateDuplicateVolumeVO(Volume oldVol, Long templateId) {
+    public VolumeVO allocateDuplicateVolumeVO(Volume oldVol, DiskOffering diskOffering, Long templateId) {
         VolumeVO newVol = new VolumeVO(oldVol.getVolumeType(), oldVol.getName(), oldVol.getDataCenterId(), oldVol.getDomainId(), oldVol.getAccountId(), oldVol.getDiskOfferingId(),
                 oldVol.getProvisioningType(), oldVol.getSize(), oldVol.getMinIops(), oldVol.getMaxIops(), oldVol.get_iScsiName());
         if (templateId != null) {
@@ -321,8 +321,7 @@ public class VolumeOrchestrator extends ManagerBase implements VolumeOrchestrati
         newVol.setInstanceId(oldVol.getInstanceId());
         newVol.setRecreatable(oldVol.isRecreatable());
         newVol.setFormat(oldVol.getFormat());
-
-        if (oldVol.getPassphraseId() != null) {
+        if ((diskOffering == null || diskOffering.getEncrypt()) && oldVol.getPassphraseId() != null) {
             PassphraseVO passphrase = passphraseDao.persist(new PassphraseVO(true));
             newVol.setPassphraseId(passphrase.getId());
         }
@@ -1180,7 +1179,7 @@ public class VolumeOrchestrator extends ManagerBase implements VolumeOrchestrati
         return Transaction.execute(new TransactionCallback<VolumeVO>() {
             @Override
             public VolumeVO doInTransaction(TransactionStatus status) {
-                VolumeVO newVolume = allocateDuplicateVolumeVO(existingVolume, templateIdToUseFinal);
+                VolumeVO newVolume = allocateDuplicateVolumeVO(existingVolume, null, templateIdToUseFinal);
                 try {
                     stateTransitTo(existingVolume, Volume.Event.DestroyRequested);
                 } catch (NoTransitionException e) {
diff --git a/engine/storage/volume/src/main/java/org/apache/cloudstack/storage/volume/VolumeServiceImpl.java b/engine/storage/volume/src/main/java/org/apache/cloudstack/storage/volume/VolumeServiceImpl.java
index 75f652da379..59d027e3c42 100644
--- a/engine/storage/volume/src/main/java/org/apache/cloudstack/storage/volume/VolumeServiceImpl.java
+++ b/engine/storage/volume/src/main/java/org/apache/cloudstack/storage/volume/VolumeServiceImpl.java
@@ -1236,7 +1236,7 @@ public class VolumeServiceImpl implements VolumeService {
 
         volumeInfo.processEvent(Event.DestroyRequested);
 
-        Volume newVol = _volumeMgr.allocateDuplicateVolume(volume, null);
+        Volume newVol = _volumeMgr.allocateDuplicateVolume(volume, null, null);
         VolumeVO newVolume = (VolumeVO) newVol;
         newVolume.set_iScsiName(null);
         volDao.update(newVolume.getId(), newVolume);
diff --git a/server/src/main/java/com/cloud/vm/UserVmManagerImpl.java b/server/src/main/java/com/cloud/vm/UserVmManagerImpl.java
index 6c8aec0da48..adab257f450 100644
--- a/server/src/main/java/com/cloud/vm/UserVmManagerImpl.java
+++ b/server/src/main/java/com/cloud/vm/UserVmManagerImpl.java
@@ -7863,19 +7863,19 @@ public class UserVmManagerImpl extends ManagerBase implements UserVmManager, Vir
                         Volume newVol = null;
                         if (newTemplateId != null) {
                             if (isISO) {
-                                newVol = volumeMgr.allocateDuplicateVolume(root, null);
+                                newVol = volumeMgr.allocateDuplicateVolume(root, diskOffering, null);
                                 userVm.setIsoId(newTemplateId);
                                 userVm.setGuestOSId(template.getGuestOSId());
                                 userVm.setTemplateId(newTemplateId);
                             } else {
-                                newVol = volumeMgr.allocateDuplicateVolume(root, newTemplateId);
+                                newVol = volumeMgr.allocateDuplicateVolume(root, diskOffering, newTemplateId);
                                 userVm.setGuestOSId(template.getGuestOSId());
                                 userVm.setTemplateId(newTemplateId);
                             }
                             // check and update VM if it can be dynamically scalable with the new template
                             updateVMDynamicallyScalabilityUsingTemplate(userVm, newTemplateId);
                         } else {
-                            newVol = volumeMgr.allocateDuplicateVolume(root, null);
+                            newVol = volumeMgr.allocateDuplicateVolume(root, diskOffering, null);
                         }
 
                         updateVolume(newVol, template, userVm, diskOffering, details);