diff --git a/server/src/main/java/com/cloud/network/NetworkServiceImpl.java b/server/src/main/java/com/cloud/network/NetworkServiceImpl.java
index 86c1b558f3a..6428e064bb1 100644
--- a/server/src/main/java/com/cloud/network/NetworkServiceImpl.java
+++ b/server/src/main/java/com/cloud/network/NetworkServiceImpl.java
@@ -1075,7 +1075,11 @@ public class NetworkServiceImpl extends ManagerBase implements NetworkService, C
         if (networkId != null) {
             guestNetwork = getNetwork(networkId);
         }
-        if (ipVO.isSourceNat() && guestNetwork != null && guestNetwork.getState() != Network.State.Allocated) {
+        Vpc vpc = null;
+        if (ipVO.getVpcId() != null) {
+            vpc = _vpcMgr.getActiveVpc(ipVO.getVpcId());
+        }
+        if (ipVO.isSourceNat() && ((guestNetwork != null && guestNetwork.getState() != Network.State.Allocated) || vpc != null)) {
             throw new IllegalArgumentException("ip address is used for source nat purposes and can not be disassociated.");
         }