diff --git a/pkg/cloudprovider/providers/azure/azure_loadbalancer.go b/pkg/cloudprovider/providers/azure/azure_loadbalancer.go
index 13577e06581..a6c0911e57b 100644
--- a/pkg/cloudprovider/providers/azure/azure_loadbalancer.go
+++ b/pkg/cloudprovider/providers/azure/azure_loadbalancer.go
@@ -69,6 +69,17 @@ const (
 	// ServiceAnnotationLoadBalancerResourceGroup is the annotation used on the service
 	// to specify the resource group of load balancer objects that are not in the same resource group as the cluster.
 	ServiceAnnotationLoadBalancerResourceGroup = "service.beta.kubernetes.io/azure-load-balancer-resource-group"
+
+	// ServiceAnnotationAllowedServiceTag is the annotation used on the service
+	// to specify a list of allowed service tags separated by comma
+	ServiceAnnotationAllowedServiceTag = "service.beta.kubernetes.io/azure-allowed-service-tags"
+)
+
+var (
+	// supportedServiceTags holds a list of supported service tags on Azure.
+	// Refer https://docs.microsoft.com/en-us/azure/virtual-network/security-overview#service-tags for more information.
+	supportedServiceTags = sets.NewString("VirtualNetwork", "VIRTUAL_NETWORK", "AzureLoadBalancer", "AZURE_LOADBALANCER",
+		"Internet", "INTERNET", "AzureTrafficManager", "Storage", "Sql")
 )
 
 // GetLoadBalancer returns whether the specified load balancer exists, and
@@ -838,8 +849,12 @@ func (az *Cloud) reconcileSecurityGroup(clusterName string, service *v1.Service,
 	if err != nil {
 		return nil, err
 	}
+	serviceTags, err := getServiceTags(service)
+	if err != nil {
+		return nil, err
+	}
 	var sourceAddressPrefixes []string
-	if sourceRanges == nil || serviceapi.IsAllowAll(sourceRanges) {
+	if (sourceRanges == nil || serviceapi.IsAllowAll(sourceRanges)) && len(serviceTags) == 0 {
 		if !requiresInternalLoadBalancer(service) {
 			sourceAddressPrefixes = []string{"Internet"}
 		}
@@ -847,6 +862,9 @@ func (az *Cloud) reconcileSecurityGroup(clusterName string, service *v1.Service,
 		for _, ip := range sourceRanges {
 			sourceAddressPrefixes = append(sourceAddressPrefixes, ip.String())
 		}
+		for _, serviceTag := range serviceTags {
+			sourceAddressPrefixes = append(sourceAddressPrefixes, serviceTag)
+		}
 	}
 	expectedSecurityRules := []network.SecurityRule{}
 
@@ -1319,3 +1337,23 @@ func useSharedSecurityRule(service *v1.Service) bool {
 
 	return false
 }
+
+func getServiceTags(service *v1.Service) ([]string, error) {
+	if serviceTags, found := service.Annotations[ServiceAnnotationAllowedServiceTag]; found {
+		tags := strings.Split(strings.TrimSpace(serviceTags), ",")
+		for _, tag := range tags {
+			// Storage and Sql service tags support setting regions with suffix ".Region"
+			if strings.HasPrefix(tag, "Storage.") || strings.HasPrefix(tag, "Sql.") {
+				continue
+			}
+
+			if !supportedServiceTags.Has(tag) {
+				return nil, fmt.Errorf("only %q are allowed in service tags", supportedServiceTags.List())
+			}
+		}
+
+		return tags, nil
+	}
+
+	return nil, nil
+}