diff --git a/federation/cmd/federation-apiserver/app/core.go b/federation/cmd/federation-apiserver/app/core.go
index 3b0084faa62..e3c807183c2 100644
--- a/federation/cmd/federation-apiserver/app/core.go
+++ b/federation/cmd/federation-apiserver/app/core.go
@@ -42,16 +42,17 @@ import (
 
 func installCoreAPIs(s *options.ServerRunOptions, g *genericapiserver.GenericAPIServer, f genericapiserver.StorageFactory) {
 	serviceStore, serviceStatusStore := serviceetcd.NewREST(createRESTOptionsOrDie(s, g, f, api.Resource("service")))
-	namespaceStore, namespaceStatusStore, _ := namespaceetcd.NewREST(createRESTOptionsOrDie(s, g, f, api.Resource("namespaces")))
+	namespaceStore, namespaceStatusStore, namespaceFinalizeStore := namespaceetcd.NewREST(createRESTOptionsOrDie(s, g, f, api.Resource("namespaces")))
 	secretStore := secretetcd.NewREST(createRESTOptionsOrDie(s, g, f, api.Resource("secrets")))
 	eventStore := eventetcd.NewREST(createRESTOptionsOrDie(s, g, f, api.Resource("events")), uint64(s.EventTTL.Seconds()))
 	coreResources := map[string]rest.Storage{
-		"secrets":           secretStore,
-		"services":          serviceStore,
-		"services/status":   serviceStatusStore,
-		"namespaces":        namespaceStore,
-		"namespaces/status": namespaceStatusStore,
-		"events":            eventStore,
+		"secrets":             secretStore,
+		"services":            serviceStore,
+		"services/status":     serviceStatusStore,
+		"namespaces":          namespaceStore,
+		"namespaces/status":   namespaceStatusStore,
+		"namespaces/finalize": namespaceFinalizeStore,
+		"events":              eventStore,
 	}
 	coreGroupMeta := registered.GroupOrDie(core.GroupName)
 	apiGroupInfo := genericapiserver.APIGroupInfo{
diff --git a/federation/pkg/federation-controller/namespace/namespace_controller.go b/federation/pkg/federation-controller/namespace/namespace_controller.go
index c3f2908bdc3..f05ab848eb6 100644
--- a/federation/pkg/federation-controller/namespace/namespace_controller.go
+++ b/federation/pkg/federation-controller/namespace/namespace_controller.go
@@ -26,6 +26,7 @@ import (
 	"k8s.io/kubernetes/federation/pkg/federation-controller/util"
 	"k8s.io/kubernetes/federation/pkg/federation-controller/util/eventsink"
 	"k8s.io/kubernetes/pkg/api"
+	"k8s.io/kubernetes/pkg/api/errors"
 	api_v1 "k8s.io/kubernetes/pkg/api/v1"
 	"k8s.io/kubernetes/pkg/client/cache"
 	kube_release_1_4 "k8s.io/kubernetes/pkg/client/clientset_generated/release_1_4"
@@ -363,7 +364,12 @@ func (nc *NamespaceController) delete(namespace *api_v1.Namespace) {
 	// TODO: What about namespaces in subclusters ???
 	err := nc.federatedApiClient.Core().Namespaces().Delete(updatedNamespace.Name, &api.DeleteOptions{})
 	if err != nil {
-		glog.Errorf("Failed to delete namespace %s: %v", namespace.Name, err)
-		nc.deliverNamespace(namespace.Name, 0, true)
+		// Its all good if the error is not found error. That means it is deleted already and we do not have to do anything.
+		// This is expected when we are processing an update as a result of namespace finalizer deletion.
+		// The process that deleted the last finalizer is also going to delete the namespace and we do not have to do anything.
+		if !errors.IsNotFound(err) {
+			glog.Errorf("Failed to delete namespace %s: %v", namespace.Name, err)
+			nc.deliverNamespace(namespace.Name, 0, true)
+		}
 	}
 }
diff --git a/test/integration/federation/server_test.go b/test/integration/federation/server_test.go
index e934d27c61f..8a6c5f4c200 100644
--- a/test/integration/federation/server_test.go
+++ b/test/integration/federation/server_test.go
@@ -283,8 +283,8 @@ func testCoreResourceList(t *testing.T) {
 	}
 	assert.Equal(t, "", apiResourceList.APIVersion)
 	assert.Equal(t, v1.SchemeGroupVersion.String(), apiResourceList.GroupVersion)
-	// Assert that there are exactly 6 resources.
-	assert.Equal(t, 6, len(apiResourceList.APIResources))
+	// Assert that there are exactly 7 resources.
+	assert.Equal(t, 7, len(apiResourceList.APIResources))
 
 	// Verify services.
 	found := findResource(apiResourceList.APIResources, "services")
@@ -301,6 +301,9 @@ func testCoreResourceList(t *testing.T) {
 	found = findResource(apiResourceList.APIResources, "namespaces/status")
 	assert.NotNil(t, found)
 	assert.False(t, found.Namespaced)
+	found = findResource(apiResourceList.APIResources, "namespaces/finalize")
+	assert.NotNil(t, found)
+	assert.False(t, found.Namespaced)
 
 	// Verify events.
 	found = findResource(apiResourceList.APIResources, "events")