diff --git a/addons/controllers/clusterbootstrap_controller.go b/addons/controllers/clusterbootstrap_controller.go
index 714ff3f34c..1f20a56373 100644
--- a/addons/controllers/clusterbootstrap_controller.go
+++ b/addons/controllers/clusterbootstrap_controller.go
@@ -170,6 +170,11 @@ func (r *ClusterBootstrapReconciler) Reconcile(ctx context.Context, req ctrl.Req
 		return ctrl.Result{}, nil
 	}
 
+	if _, labelFound := tkr.Labels[constants.TKRLableLegacyClusters]; labelFound {
+		log.Info("Skipping reconciling due to tkr label", "name", tkrName, "label", constants.TKRLableLegacyClusters)
+		return ctrl.Result{}, nil
+	}
+
 	log.Info("Reconciling cluster")
 
 	// if deletion timestamp is set, handle cluster deletion
diff --git a/addons/controllers/clusterbootstrap_controller_test.go b/addons/controllers/clusterbootstrap_controller_test.go
index a0f0948587..6e692c307f 100644
--- a/addons/controllers/clusterbootstrap_controller_test.go
+++ b/addons/controllers/clusterbootstrap_controller_test.go
@@ -924,6 +924,22 @@ var _ = Describe("ClusterBootstrap Reconciler", func() {
 		})
 	})
 
+	When("Legacy cluster is created", func() {
+		BeforeEach(func() {
+			clusterName = "test-cluster-legacy"
+			clusterNamespace = "legacy-namespace"
+			clusterResourceFilePath = "testdata/test-cluster-legacy.yaml"
+		})
+		Context("and clusterboostrap template does not exists", func() {
+			It("clusterbootstrap controller should not attempt to reconcile it", func() {
+				By("verifying CAPI cluster is created properly")
+				cluster := &clusterapiv1beta1.Cluster{}
+				Expect(k8sClient.Get(ctx, client.ObjectKey{Namespace: clusterNamespace, Name: clusterName}, cluster)).To(Succeed())
+				cluster.Status.Phase = string(clusterapiv1beta1.ClusterPhaseProvisioned)
+				Expect(k8sClient.Status().Update(ctx, cluster)).To(Succeed())
+			})
+		})
+	})
 })
 
 func assertSecretContains(ctx context.Context, k8sClient client.Client, namespace, name string, secretContent map[string][]byte) {
diff --git a/addons/controllers/testdata/test-cluster-legacy.yaml b/addons/controllers/testdata/test-cluster-legacy.yaml
new file mode 100644
index 0000000000..60dd37ca85
--- /dev/null
+++ b/addons/controllers/testdata/test-cluster-legacy.yaml
@@ -0,0 +1,69 @@
+---
+apiVersion: v1
+kind: Namespace
+metadata:
+  name: legacy-namespace
+---
+apiVersion: cluster.x-k8s.io/v1beta1
+kind: Cluster
+metadata:
+  name: test-cluster-legacy
+  namespace: legacy-namespace
+  labels:
+    tkg.tanzu.vmware.com/cluster-name: test-cluster-legacy
+    run.tanzu.vmware.com/tkr: v1.12.1
+spec:
+  infrastructureRef:
+    kind: VSphereCluster
+  clusterNetwork:
+    pods:
+      cidrBlocks: [ "192.168.0.0/16","fd00:100:96::/48" ]
+    services:
+      cidrBlocks: [ "192.168.0.0/16","fd00:100:96::/48" ]
+  controlPlaneRef:
+    apiVersion: controlplane.cluster.x-k8s.io/v1beta1
+    kind: KubeadmControlPlane
+    name: test-cluster-legacy-control-plane
+    namespace: legacy-namespace
+  topology:
+    class: test-clusterclass-legasy
+    version: v1.22.3
+    variables:
+      - name: tkg.tanzu.vmware.com/tkg-ip-family
+        value: "ipv4"
+      - name: proxy
+        value:
+          httpProxy: "foo.com"
+          httpsProxy: "bar.com"
+          noProxy: "foobar.com"
+      - name: trust
+        value:
+          additionalTrustedCAs:
+            - name: CompanyInternalCA-1
+              data: aGVsbG8=
+            - name: CompanyInternalCA-2
+              data: bHWtcH9=
+      - name: skipTLSVerify
+        value:
+          - registry1
+          - registry2
+---
+apiVersion: controlplane.cluster.x-k8s.io/v1beta1
+kind: KubeadmControlPlane
+metadata:
+  name: test-cluster-legacy-control-plane
+  namespace: legacy-namespace
+  ownerReferences:
+    - apiVersion: cluster.x-k8s.io/v1beta1
+      kind: Cluster
+      name: test-cluster-legacy
+      uid: bd834522-d9a5-4841-beac-991ff3798c01
+spec:
+  kubeadmConfigSpec: {}
+  machineTemplate:
+    infrastructureRef: {}
+  replicas: 3
+  version: v1.22.3
+
+
+
diff --git a/addons/controllers/testdata/test-tkg-system-ns-resources.yaml b/addons/controllers/testdata/test-tkg-system-ns-resources.yaml
index 34048f805f..02cafd8910 100644
--- a/addons/controllers/testdata/test-tkg-system-ns-resources.yaml
+++ b/addons/controllers/testdata/test-tkg-system-ns-resources.yaml
@@ -22,6 +22,20 @@ spec:
     imageRepository: foo
   osImages: []
   bootstrapPackages: []
+---
+  apiVersion: run.tanzu.vmware.com/v1alpha3
+  kind: TanzuKubernetesRelease
+  metadata:
+    name: v1.12.1
+    labels:
+      run.tanzu.vmware.com/legacy-tkr: ""
+  spec:
+    version: v1.12.1
+    kubernetes:
+      version: v1.12.1
+      imageRepository: foo
+    osImages: [ ]
+    bootstrapPackages: [ ]
 ---
 apiVersion: run.tanzu.vmware.com/v1alpha3
 kind: ClusterBootstrapTemplate
diff --git a/addons/pkg/constants/constants.go b/addons/pkg/constants/constants.go
index da1c3e056d..123011fc7c 100644
--- a/addons/pkg/constants/constants.go
+++ b/addons/pkg/constants/constants.go
@@ -35,6 +35,9 @@ const (
 	// TKRLabelClassyClusters is the TKR label for the clusters created using cluster-class
 	TKRLabelClassyClusters = "run.tanzu.vmware.com/tkr"
 
+	// TKRLabelLegacyClusters is the TKR label for legacy clusters
+	TKRLableLegacyClusters = "run.tanzu.vmware.com/legacy-tkr"
+
 	// TKGBomContent is the TKG BOM content.
 	TKGBomContent = "bomContent"