diff --git a/hypervisor/arch/x86/guest/vm.c b/hypervisor/arch/x86/guest/vm.c
index 0bb591c06..f5dec506d 100644
--- a/hypervisor/arch/x86/guest/vm.c
+++ b/hypervisor/arch/x86/guest/vm.c
@@ -457,6 +457,7 @@ int32_t shutdown_vm(struct acrn_vm *vm)
 {
 	uint16_t i;
 	struct acrn_vcpu *vcpu = NULL;
+	struct acrn_vm_config *vm_config = NULL;
 	int32_t ret;
 
 	pause_vm(vm);
@@ -470,6 +471,9 @@ int32_t shutdown_vm(struct acrn_vm *vm)
 			offline_vcpu(vcpu);
 		}
 
+		vm_config = get_vm_config(vm->vm_id);
+		vm_config->guest_flags &= ~DM_OWNED_GUEST_FLAG_MASK;
+
 		ptdev_release_all_entries(vm);
 
 		vpci_cleanup(vm);
diff --git a/hypervisor/common/hypercall.c b/hypervisor/common/hypercall.c
index 9d00c9f9b..7a949f311 100644
--- a/hypervisor/common/hypercall.c
+++ b/hypervisor/common/hypercall.c
@@ -157,7 +157,9 @@ int32_t hcall_create_vm(struct acrn_vm *vm, uint64_t param)
 		if ((vm_id < CONFIG_MAX_VM_NUM)
 			&& (!is_valid_vm(get_vm_from_vmid(vm_id)))) {
 			vm_config = get_vm_config(vm_id);
-			vm_config->guest_flags |= cv.vm_flag;
+
+			/* Filter out the bits should not set by DM and then assign it to guest_flags */
+			vm_config->guest_flags |= (cv.vm_flag & DM_OWNED_GUEST_FLAG_MASK);
 
 			/* GUEST_FLAG_RT must be set if we have GUEST_FLAG_LAPIC_PASSTHROUGH set in guest_flags */
 			if (((vm_config->guest_flags & GUEST_FLAG_LAPIC_PASSTHROUGH) != 0U)
diff --git a/hypervisor/scenarios/logical_partition/vm_configurations.h b/hypervisor/scenarios/logical_partition/vm_configurations.h
index 6d9a4cd34..24b1c9309 100644
--- a/hypervisor/scenarios/logical_partition/vm_configurations.h
+++ b/hypervisor/scenarios/logical_partition/vm_configurations.h
@@ -7,6 +7,9 @@
 #ifndef VM_CONFIGURATIONS_H
 #define VM_CONFIGURATIONS_H
 
+/* Bits mask of guest flags that can be programmed by device model. Other bits are set by hypervisor only */
+#define DM_OWNED_GUEST_FLAG_MASK	0UL
+
 #define CONFIG_MAX_VM_NUM	2U
 
 /* The VM CONFIGs like:
diff --git a/hypervisor/scenarios/sdc/vm_configurations.h b/hypervisor/scenarios/sdc/vm_configurations.h
index 6c49865f9..bba9515e3 100644
--- a/hypervisor/scenarios/sdc/vm_configurations.h
+++ b/hypervisor/scenarios/sdc/vm_configurations.h
@@ -9,4 +9,9 @@
 
 #define CONFIG_MAX_VM_NUM	2U
 
+/* Bits mask of guest flags that can be programmed by device model. Other bits are set by hypervisor only */
+#define DM_OWNED_GUEST_FLAG_MASK	(GUEST_FLAG_SECURE_WORLD_ENABLED | GUEST_FLAG_LAPIC_PASSTHROUGH | \
+						GUEST_FLAG_RT | GUEST_FLAG_IO_COMPLETION_POLLING)
+
+
 #endif /* VM_CONFIGURATIONS_H */