diff --git a/staging/src/k8s.io/legacy-cloud-providers/azure/azure_instances.go b/staging/src/k8s.io/legacy-cloud-providers/azure/azure_instances.go
index fe4cb11507c..aff9dbf0c2c 100644
--- a/staging/src/k8s.io/legacy-cloud-providers/azure/azure_instances.go
+++ b/staging/src/k8s.io/legacy-cloud-providers/azure/azure_instances.go
@@ -32,9 +32,10 @@ import (
 )
 
 const (
-	vmPowerStatePrefix      = "PowerState/"
-	vmPowerStateStopped     = "stopped"
-	vmPowerStateDeallocated = "deallocated"
+	vmPowerStatePrefix       = "PowerState/"
+	vmPowerStateStopped      = "stopped"
+	vmPowerStateDeallocated  = "deallocated"
+	vmPowerStateDeallocating = "deallocating"
 )
 
 var (
@@ -230,7 +231,8 @@ func (az *Cloud) InstanceShutdownByProviderID(ctx context.Context, providerID st
 	}
 	klog.V(5).Infof("InstanceShutdownByProviderID gets power status %q for node %q", powerStatus, nodeName)
 
-	return strings.ToLower(powerStatus) == vmPowerStateStopped || strings.ToLower(powerStatus) == vmPowerStateDeallocated, nil
+	status := strings.ToLower(powerStatus)
+	return status == vmPowerStateStopped || status == vmPowerStateDeallocated || status == vmPowerStateDeallocating, nil
 }
 
 // InstanceMetadataByProviderID returns metadata of the specified instance.
diff --git a/staging/src/k8s.io/legacy-cloud-providers/azure/azure_instances_test.go b/staging/src/k8s.io/legacy-cloud-providers/azure/azure_instances_test.go
index a8693276017..134953ea065 100644
--- a/staging/src/k8s.io/legacy-cloud-providers/azure/azure_instances_test.go
+++ b/staging/src/k8s.io/legacy-cloud-providers/azure/azure_instances_test.go
@@ -284,7 +284,7 @@ func TestInstanceShutdownByProviderID(t *testing.T) {
 			vmList:     map[string]string{"vm3": "PowerState/Deallocating"},
 			nodeName:   "vm3",
 			providerID: "azure:///subscriptions/subscription/resourceGroups/rg/providers/Microsoft.Compute/virtualMachines/vm3",
-			expected:   false,
+			expected:   true,
 		},
 		{
 			name:       "InstanceShutdownByProviderID should return false if the vm is in PowerState/Starting status",