diff --git a/README.md b/README.md
index 59ad065d..acaafdf0 100644
--- a/README.md
+++ b/README.md
@@ -47,6 +47,19 @@ nodes:
 
 ```
 
+## Kubernetes Version
+
+The current default kubernetes version used by RKE is `v1.10.1-rancher1`.
+
+There are two ways to select a kubernetes version:
+
+- Using the kubernetes image defined in  [System Images](#rke-system-images)
+- Using the configuration option `kubernetes_version`
+
+In case both are defined, the system images configuration will take precedence over `kuberntest_version`. Since the `kubernetes_version` options was added mainly to be used by Rancher v2.0, it has a limited number of supported tags that can be found [here](https://github.com/rancher/types/blob/master/apis/management.cattle.io/v3/k8s_defaults.go#L14).
+
+If a the version defined in `kuberntest_version` is not found ins this map, the default kubernretes version is used.
+
 ## Network Plugins
 
 RKE supports the following network plugins that are deployed as addons:
diff --git a/cluster.yml b/cluster.yml
index 17d1fb47..e1a72d4d 100644
--- a/cluster.yml
+++ b/cluster.yml
@@ -153,10 +153,10 @@ authorization:
 
 # If set to true, rke won't fail when unsupported Docker version is found
 ignore_docker_version: false
+# The kubernetes version used. For now, this should match the version defined in rancher/types defaults map: https://github.com/rancher/types/blob/master/apis/management.cattle.io/v3/k8s_defaults.go#L14
+kubernetes_version: v1.10.1-rancher1
 
-kubernetes_version: v1.10.1
-
-# addons are deployed using kubernetes jobs. RKE will give up on trying to get the job status after this timeout in seconds.. 
+# addons are deployed using kubernetes jobs. RKE will give up on trying to get the job status after this timeout in seconds..
 addon_job_timeout: 30
 # If set, this is the cluster name that will be used in the kube config file
 # Default value is "local"