diff --git a/pkg/cidata/cidata.TEMPLATE.d/lima.env b/pkg/cidata/cidata.TEMPLATE.d/lima.env
index e08129b5a22..8cd9453ccdc 100644
--- a/pkg/cidata/cidata.TEMPLATE.d/lima.env
+++ b/pkg/cidata/cidata.TEMPLATE.d/lima.env
@@ -65,3 +65,8 @@ LIMA_CIDATA_PLAIN=1
 {{- else}}
 LIMA_CIDATA_PLAIN=
 {{- end}}
+{{- if .NoCloudInit}}
+LIMA_CIDATA_NO_CLOUD_INIT=1
+{{- else}}
+LIMA_CIDATA_NO_CLOUD_INIT=
+{{- end}}
diff --git a/pkg/cidata/cidata.go b/pkg/cidata/cidata.go
index 4a38c0c2fbf..ad024acba14 100644
--- a/pkg/cidata/cidata.go
+++ b/pkg/cidata/cidata.go
@@ -118,7 +118,7 @@ func setupEnv(instConfigEnv map[string]string, propagateProxyEnv bool, slirpGate
 	return env, nil
 }
 
-func templateArgs(ctx context.Context, bootScripts bool, instDir, name string, instConfig *limatype.LimaYAML, udpDNSLocalPort, tcpDNSLocalPort, vsockPort int, virtioPort string) (*TemplateArgs, error) {
+func templateArgs(ctx context.Context, bootScripts bool, instDir, name string, instConfig *limatype.LimaYAML, udpDNSLocalPort, tcpDNSLocalPort, vsockPort int, virtioPort string, noCloudInit bool) (*TemplateArgs, error) {
 	if err := limayaml.Validate(instConfig, false); err != nil {
 		return nil, err
 	}
@@ -138,12 +138,13 @@ func templateArgs(ctx context.Context, bootScripts bool, instDir, name string, i
 		Containerd:         Containerd{System: *instConfig.Containerd.System, User: *instConfig.Containerd.User, Archive: archive},
 		SlirpNICName:       networks.SlirpNICName,
 
-		VMType:     *instConfig.VMType,
-		VSockPort:  vsockPort,
-		VirtioPort: virtioPort,
-		Plain:      *instConfig.Plain,
-		TimeZone:   *instConfig.TimeZone,
-		Param:      instConfig.Param,
+		VMType:      *instConfig.VMType,
+		VSockPort:   vsockPort,
+		VirtioPort:  virtioPort,
+		Plain:       *instConfig.Plain,
+		TimeZone:    *instConfig.TimeZone,
+		NoCloudInit: noCloudInit,
+		Param:       instConfig.Param,
 	}
 
 	if instConfig.VMOpts.VZ.Rosetta.Enabled != nil {
@@ -350,7 +351,7 @@ func templateArgs(ctx context.Context, bootScripts bool, instDir, name string, i
 }
 
 func GenerateCloudConfig(ctx context.Context, instDir, name string, instConfig *limatype.LimaYAML) error {
-	args, err := templateArgs(ctx, false, instDir, name, instConfig, 0, 0, 0, "")
+	args, err := templateArgs(ctx, false, instDir, name, instConfig, 0, 0, 0, "", false)
 	if err != nil {
 		return err
 	}
@@ -372,8 +373,8 @@ func GenerateCloudConfig(ctx context.Context, instDir, name string, instConfig *
 	return os.WriteFile(filepath.Join(instDir, filenames.CloudConfig), config, 0o444)
 }
 
-func GenerateISO9660(ctx context.Context, drv driver.Driver, instDir, name string, instConfig *limatype.LimaYAML, udpDNSLocalPort, tcpDNSLocalPort int, guestAgentBinary, nerdctlArchive string, vsockPort int, virtioPort string) error {
-	args, err := templateArgs(ctx, true, instDir, name, instConfig, udpDNSLocalPort, tcpDNSLocalPort, vsockPort, virtioPort)
+func GenerateISO9660(ctx context.Context, drv driver.Driver, instDir, name string, instConfig *limatype.LimaYAML, udpDNSLocalPort, tcpDNSLocalPort int, guestAgentBinary, nerdctlArchive string, vsockPort int, virtioPort string, noCloudInit bool) error {
+	args, err := templateArgs(ctx, true, instDir, name, instConfig, udpDNSLocalPort, tcpDNSLocalPort, vsockPort, virtioPort, noCloudInit)
 	if err != nil {
 		return err
 	}
@@ -466,7 +467,7 @@ func GenerateISO9660(ctx context.Context, drv driver.Driver, instDir, name strin
 		})
 	}
 
-	if args.VMType == limatype.WSL2 {
+	if noCloudInit {
 		layout = append(layout, iso9660util.Entry{
 			Path:   "ssh_authorized_keys",
 			Reader: strings.NewReader(strings.Join(args.SSHPubKeys, "\n")),
diff --git a/pkg/cidata/template.go b/pkg/cidata/template.go
index 3d886e7a5e6..84dfafce86d 100644
--- a/pkg/cidata/template.go
+++ b/pkg/cidata/template.go
@@ -114,6 +114,7 @@ type TemplateArgs struct {
 	VirtioPort                      string
 	Plain                           bool
 	TimeZone                        string
+	NoCloudInit                     bool
 }
 
 func ValidateTemplateArgs(args *TemplateArgs) error {
diff --git a/pkg/driver/driver.go b/pkg/driver/driver.go
index 94c192f0cd4..fc3a1afd653 100644
--- a/pkg/driver/driver.go
+++ b/pkg/driver/driver.go
@@ -106,4 +106,5 @@ type DriverFeatures struct {
 	CanRunGUI            bool `json:"canRunGui,omitempty"`
 	DynamicSSHAddress    bool `json:"dynamicSSHAddress"`
 	SkipSocketForwarding bool `json:"skipSocketForwarding"`
+	NoCloudInit          bool `json:"noCloudInit"`
 }
diff --git a/pkg/driver/wsl2/boot/02-wsl2-setup.sh b/pkg/driver/wsl2/boot/02-no-cloud-init-setup.sh
similarity index 85%
rename from pkg/driver/wsl2/boot/02-wsl2-setup.sh
rename to pkg/driver/wsl2/boot/02-no-cloud-init-setup.sh
index cb5639657d3..ebfe351cd3e 100755
--- a/pkg/driver/wsl2/boot/02-wsl2-setup.sh
+++ b/pkg/driver/wsl2/boot/02-no-cloud-init-setup.sh
@@ -4,8 +4,8 @@
 # SPDX-License-Identifier: Apache-2.0
 
 # This script replaces the cloud-init functionality of creating a user and setting its SSH keys
-# when using a WSL2 VM.
-[ "$LIMA_CIDATA_VMTYPE" = "wsl2" ] || exit 0
+# when cloud-init is not available
+[ "$LIMA_CIDATA_NO_CLOUD_INIT" = "1" ] || exit 0
 
 # create user
 # shellcheck disable=SC2153
@@ -22,4 +22,4 @@ chmod 600 "${LIMA_CIDATA_HOME}"/.ssh/authorized_keys
 echo "${LIMA_CIDATA_USER} ALL=(ALL) NOPASSWD:ALL" | tee -a /etc/sudoers.d/99_lima_sudoers
 
 # symlink CIDATA to the hardcoded path for requirement checks (TODO: make this not hardcoded)
-ln -sfFn "${LIMA_CIDATA_MNT}" /mnt/lima-cidata
+[ "$LIMA_CIDATA_MNT" = "/mnt/lima-cidata" ] || ln -sfFn "${LIMA_CIDATA_MNT}" /mnt/lima-cidata
diff --git a/pkg/driver/wsl2/wsl_driver_windows.go b/pkg/driver/wsl2/wsl_driver_windows.go
index 17886de8863..ae8252b1639 100644
--- a/pkg/driver/wsl2/wsl_driver_windows.go
+++ b/pkg/driver/wsl2/wsl_driver_windows.go
@@ -310,6 +310,7 @@ func (l *LimaWslDriver) Info() driver.Info {
 	info.Features = driver.DriverFeatures{
 		DynamicSSHAddress:    true,
 		SkipSocketForwarding: true,
+		NoCloudInit:          true,
 		CanRunGUI:            l.canRunGUI(),
 	}
 	return info
diff --git a/pkg/hostagent/hostagent.go b/pkg/hostagent/hostagent.go
index 3affdf6b0c1..41738e2d28e 100644
--- a/pkg/hostagent/hostagent.go
+++ b/pkg/hostagent/hostagent.go
@@ -162,11 +162,12 @@ func New(ctx context.Context, instName string, stdout io.Writer, signalCh chan o
 
 	vSockPort := limaDriver.Info().VsockPort
 	virtioPort := limaDriver.Info().VirtioPort
+	noCloudInit := limaDriver.Info().Features.NoCloudInit
 
 	if err := cidata.GenerateCloudConfig(ctx, inst.Dir, instName, inst.Config); err != nil {
 		return nil, err
 	}
-	if err := cidata.GenerateISO9660(ctx, limaDriver, inst.Dir, instName, inst.Config, udpDNSLocalPort, tcpDNSLocalPort, o.guestAgentBinary, o.nerdctlArchive, vSockPort, virtioPort); err != nil {
+	if err := cidata.GenerateISO9660(ctx, limaDriver, inst.Dir, instName, inst.Config, udpDNSLocalPort, tcpDNSLocalPort, o.guestAgentBinary, o.nerdctlArchive, vSockPort, virtioPort, noCloudInit); err != nil {
 		return nil, err
 	}