diff --git a/core/src/com/cloud/dc/dao/DataCenterLinkLocalIpAddressDaoImpl.java b/core/src/com/cloud/dc/dao/DataCenterLinkLocalIpAddressDaoImpl.java
index 17414e28d58..484d84005b0 100644
--- a/core/src/com/cloud/dc/dao/DataCenterLinkLocalIpAddressDaoImpl.java
+++ b/core/src/com/cloud/dc/dao/DataCenterLinkLocalIpAddressDaoImpl.java
@@ -52,6 +52,7 @@ public class DataCenterLinkLocalIpAddressDaoImpl extends GenericDaoBase<DataCent
         SearchCriteria sc = FreeIpSearch.create();
         sc.setParameters("dc", dcId);
         sc.setParameters("pod", podId);
+        sc.setParameters("ipAddr", NetUtils.getLinkLocalGateway());  /*explicitly removing the gateway*/
         
         Transaction txn = Transaction.currentTxn();
         try {
@@ -141,6 +142,7 @@ public class DataCenterLinkLocalIpAddressDaoImpl extends GenericDaoBase<DataCent
         FreeIpSearch = createSearchBuilder();
         FreeIpSearch.and("dc", FreeIpSearch.entity().getDataCenterId(), SearchCriteria.Op.EQ);
         FreeIpSearch.and("pod", FreeIpSearch.entity().getPodId(), SearchCriteria.Op.EQ);
+        FreeIpSearch.and("ipAddr", FreeIpSearch.entity().getIpAddress(), SearchCriteria.Op.NEQ);
         FreeIpSearch.and("taken", FreeIpSearch.entity().getTakenAt(), SearchCriteria.Op.NULL);
         FreeIpSearch.done();
         
diff --git a/utils/src/com/cloud/utils/net/NetUtils.java b/utils/src/com/cloud/utils/net/NetUtils.java
index d0e3428f094..df63bcb505b 100755
--- a/utils/src/com/cloud/utils/net/NetUtils.java
+++ b/utils/src/com/cloud/utils/net/NetUtils.java
@@ -668,7 +668,15 @@ public class NetUtils {
     		return null;
     	}
     	/*reserve gateway*/
-    	return getIpRangeFromCidr(getLinkLocalGateway(), 32 - size);
+    	String[] range = getIpRangeFromCidr(getLinkLocalGateway(), 32 - size);
+    	 
+    	if (range[0].equalsIgnoreCase(getLinkLocalGateway())) {
+    		/*remove the gateway*/
+    		long ip = ip2Long(range[0]);
+    		ip += 1;
+    		range[0] = long2Ip(ip);
+    	}
+    	return range;
     }
     
     public static String getLinkLocalIpEnd() {