diff --git a/api/src/com/cloud/vm/VirtualMachine.java b/api/src/com/cloud/vm/VirtualMachine.java
index 6021846c376..5cad493161f 100755
--- a/api/src/com/cloud/vm/VirtualMachine.java
+++ b/api/src/com/cloud/vm/VirtualMachine.java
@@ -69,7 +69,12 @@ public interface VirtualMachine extends RunningOn, ControlledEntity, StateObject
             s_fsm.addTransition(State.Stopped, VirtualMachine.Event.DestroyRequested, State.Destroyed);
             s_fsm.addTransition(State.Stopped, VirtualMachine.Event.StopRequested, State.Stopped);
             s_fsm.addTransition(State.Stopped, VirtualMachine.Event.AgentReportStopped, State.Stopped);
-            s_fsm.addTransition(State.Stopped, VirtualMachine.Event.OperationFailed, State.Error);
+            
+            // please pay attention about state transition to Error state, there should be only one case (failed in VM creation process)
+            // that can have such transition
+            s_fsm.addTransition(State.Stopped, VirtualMachine.Event.OperationFailedToError, State.Error);
+            
+            s_fsm.addTransition(State.Stopped, VirtualMachine.Event.OperationFailed, State.Stopped);
             s_fsm.addTransition(State.Stopped, VirtualMachine.Event.ExpungeOperation, State.Expunging);
             s_fsm.addTransition(State.Stopped, VirtualMachine.Event.AgentReportShutdowned, State.Stopped);
             s_fsm.addTransition(State.Stopped, VirtualMachine.Event.AgentReportMigrated, State.Stopped);
@@ -156,6 +161,7 @@ public interface VirtualMachine extends RunningOn, ControlledEntity, StateObject
     	ExpungeOperation,
     	OperationSucceeded,
     	OperationFailed,
+    	OperationFailedToError,
     	OperationRetry,
     	AgentReportShutdowned,
     	AgentReportMigrated
diff --git a/server/src/com/cloud/vm/UserVmManagerImpl.java b/server/src/com/cloud/vm/UserVmManagerImpl.java
index 0e1dd14b366..b8e8cfaff65 100755
--- a/server/src/com/cloud/vm/UserVmManagerImpl.java
+++ b/server/src/com/cloud/vm/UserVmManagerImpl.java
@@ -1641,7 +1641,7 @@ public class UserVmManagerImpl implements UserVmManager, UserVmService, Manager
         if (vm != null) {
             if (vm.getState().equals(State.Stopped)) {
                 try {
-                    _itMgr.stateTransitTo(vm, VirtualMachine.Event.OperationFailed, null);
+                    _itMgr.stateTransitTo(vm, VirtualMachine.Event.OperationFailedToError, null);
                 } catch (NoTransitionException e1) {
                     s_logger.warn(e1.getMessage());
                 }