diff --git a/staging/src/k8s.io/legacy-cloud-providers/azure/azure_vmss.go b/staging/src/k8s.io/legacy-cloud-providers/azure/azure_vmss.go
index 68af42568fa..9831bf0e7da 100644
--- a/staging/src/k8s.io/legacy-cloud-providers/azure/azure_vmss.go
+++ b/staging/src/k8s.io/legacy-cloud-providers/azure/azure_vmss.go
@@ -954,6 +954,12 @@ func (ss *scaleSet) ensureVMSSInPool(service *v1.Service, nodes []*v1.Node, back
 			if ss.excludeMasterNodesFromStandardLB() && isMasterNode(node) {
 				continue
 			}
+
+			if ss.ShouldNodeExcludedFromLoadBalancer(node) {
+				klog.V(4).Infof("Excluding unmanaged/external-resource-group node %q", node.Name)
+				continue
+			}
+
 			// in this scenario the vmSetName is an empty string and the name of vmss should be obtained from the provider IDs of nodes
 			resourceGroupName, vmssName, err := getVmssAndResourceGroupNameByVMProviderID(node.Spec.ProviderID)
 			if err != nil {