diff --git a/addons/controllers/cpi/vspherecpiconfig_controller.go b/addons/controllers/cpi/vspherecpiconfig_controller.go
index 0b5af32a2a..4eb01b327b 100644
--- a/addons/controllers/cpi/vspherecpiconfig_controller.go
+++ b/addons/controllers/cpi/vspherecpiconfig_controller.go
@@ -95,6 +95,12 @@ func (r *VSphereCPIConfigReconciler) Reconcile(ctx context.Context, req ctrl.Req
 		return ctrl.Result{}, err
 	}
 
+	annotations := cpiConfig.GetAnnotations()
+	if _, ok := annotations[constants.TKGAnnotationTemplateConfig]; ok {
+		logger.Info(fmt.Sprintf("resource '%v' is a config template. Skipping reconciling", req.NamespacedName))
+		return ctrl.Result{}, nil
+	}
+
 	// deep copy VSphereCPIConfig to avoid issues if in the future other controllers where interacting with the same copy
 	cpiConfig = cpiConfig.DeepCopy()