diff --git a/classes/wic-swu-img.bbclass b/classes/wic-swu-img.bbclass
index b93a96a..41b2164 100644
--- a/classes/wic-swu-img.bbclass
+++ b/classes/wic-swu-img.bbclass
@@ -15,8 +15,6 @@ inherit squashfs-img
 inherit wic-img
 inherit swupdate-img
 
-IMAGE_INSTALL += "etc-overlay-fs"
-
 INITRAMFS_RECIPE ?= "cip-core-initramfs"
 INITRD_IMAGE = "${INITRAMFS_RECIPE}-${DISTRO}-${MACHINE}.initrd.img"
 
diff --git a/recipes-core/etc-overlay-fs/etc-overlay-fs_0.1.bb b/recipes-core/etc-overlay-fs/etc-overlay-fs_0.1.bb
deleted file mode 100644
index 4e2b80b..0000000
--- a/recipes-core/etc-overlay-fs/etc-overlay-fs_0.1.bb
+++ /dev/null
@@ -1,32 +0,0 @@
-#
-# CIP Core, generic profile
-#
-# Copyright (c) Siemens AG, 2021
-#
-# Authors:
-#  Quirin Gylstorff <quirin.gylstorff@siemens.com>
-#
-# SPDX-License-Identifier: MIT
-
-inherit dpkg-raw
-
-SRC_URI = "file://postinst \
-           file://etc.mount \
-           file://etc-hostname.service \
-           file://etc-sshd-regen-keys.conf \
-           file://etc-sysusers.conf"
-
-do_install[cleandirs]+="${D}/usr/lib/systemd/system \
-                        ${D}/usr/lib/systemd/system/local-fs.target.wants \
-                        ${D}/usr/lib/systemd/system/systemd-sysusers.service.d \
-                        ${D}/usr/lib/systemd/system/sshd-regen-keys.service.d \
-                        ${D}/var/local/etc \
-                        ${D}/var/local/.atomic \
-                        "
-do_install() {
-    TARGET=${D}/usr/lib/systemd/system
-    install -m 0644 ${WORKDIR}/etc.mount ${TARGET}/etc.mount
-    install -m 0644 ${WORKDIR}/etc-hostname.service ${TARGET}/etc-hostname.service
-    install -m 0644 ${WORKDIR}/etc-sshd-regen-keys.conf ${D}/usr/lib/systemd/system/sshd-regen-keys.service.d/etc-sshd-regen-keys.conf
-    install -m 0644 ${WORKDIR}/etc-sysusers.conf ${D}/usr/lib/systemd/system/systemd-sysusers.service.d/etc-sysusers.service
-}
diff --git a/recipes-core/etc-overlay-fs/files/etc-hostname.service b/recipes-core/etc-overlay-fs/files/etc-hostname.service
deleted file mode 100644
index 2306b9f..0000000
--- a/recipes-core/etc-overlay-fs/files/etc-hostname.service
+++ /dev/null
@@ -1,14 +0,0 @@
-[Unit]
-Description=set hostname /etc overlay-aware
-Before=network-pre.target
-Wants=network-pre.target
-Requires=etc.mount
-After=etc.mount
-
-[Service]
-Type=oneshot
-RemainAfterExit=yes
-ExecStart=/bin/hostname --boot --file /etc/hostname
-
-[Install]
-WantedBy=basic.target
diff --git a/recipes-core/etc-overlay-fs/files/etc-sshd-regen-keys.conf b/recipes-core/etc-overlay-fs/files/etc-sshd-regen-keys.conf
deleted file mode 100644
index b386c12..0000000
--- a/recipes-core/etc-overlay-fs/files/etc-sshd-regen-keys.conf
+++ /dev/null
@@ -1,6 +0,0 @@
-[Unit]
-# set hostname /etc overlay-aware
-Before=network-pre.target
-Wants=network-pre.target
-Requires=etc.mount
-After=etc.mount
diff --git a/recipes-core/etc-overlay-fs/files/etc-sysusers.conf b/recipes-core/etc-overlay-fs/files/etc-sysusers.conf
deleted file mode 100644
index ad45d7f..0000000
--- a/recipes-core/etc-overlay-fs/files/etc-sysusers.conf
+++ /dev/null
@@ -1,4 +0,0 @@
-[Unit]
-# make systemd-sysusers /etc overlay aware
-Requires=etc.mount
-After=etc.mount
diff --git a/recipes-core/etc-overlay-fs/files/etc.mount b/recipes-core/etc-overlay-fs/files/etc.mount
deleted file mode 100644
index f0ae3c5..0000000
--- a/recipes-core/etc-overlay-fs/files/etc.mount
+++ /dev/null
@@ -1,13 +0,0 @@
-[Unit]
-Description=Overlay-mount /etc
-Requires=var.mount
-After=var.mount
-
-[Mount]
-What=overlay
-Where=/etc
-Type=overlay
-Options=noauto,x-systemd.automount,lowerdir=/etc,upperdir=/var/local/etc,workdir=/var/local/.atomic
-
-[Install]
-WantedBy=local-fs.target
diff --git a/recipes-core/etc-overlay-fs/files/postinst b/recipes-core/etc-overlay-fs/files/postinst
deleted file mode 100755
index e436b53..0000000
--- a/recipes-core/etc-overlay-fs/files/postinst
+++ /dev/null
@@ -1,4 +0,0 @@
-#!/bin/sh
-
-deb-systemd-helper enable etc.mount  || true
-deb-systemd-helper enable etc-hostname.service || true
diff --git a/recipes-initramfs/cip-core-initramfs/cip-core-initramfs.bb b/recipes-initramfs/cip-core-initramfs/cip-core-initramfs.bb
index 649daa2..9e0ee26 100644
--- a/recipes-initramfs/cip-core-initramfs/cip-core-initramfs.bb
+++ b/recipes-initramfs/cip-core-initramfs/cip-core-initramfs.bb
@@ -10,3 +10,7 @@
 #
 
 inherit initramfs
+
+INITRAMFS_INSTALL += " \
+    initramfs-etc-overlay-hook \
+    "
diff --git a/recipes-initramfs/initramfs-etc-overlay-hook/files/etc-overlay.script b/recipes-initramfs/initramfs-etc-overlay-hook/files/etc-overlay.script
new file mode 100644
index 0000000..08271cd
--- /dev/null
+++ b/recipes-initramfs/initramfs-etc-overlay-hook/files/etc-overlay.script
@@ -0,0 +1,24 @@
+#!/bin/sh
+
+PREREQ=""
+
+prereqs()
+{
+	echo "$PREREQ"
+}
+
+case $1 in
+# get pre-requisites
+prereqs)
+	prereqs
+	exit 0
+	;;
+esac
+
+. /scripts/functions
+
+mount -t $(get_fstype /dev/disk/by-label/var) /dev/disk/by-label/var ${rootmnt}/var
+
+mkdir -p ${rootmnt}/var/local/etc
+mkdir -p ${rootmnt}/var/local/.atomic
+mount -t overlay -o lowerdir=${rootmnt}/etc,upperdir=${rootmnt}/var/local/etc,workdir=${rootmnt}/var/local/.atomic overlay ${rootmnt}/etc
diff --git a/recipes-initramfs/initramfs-etc-overlay-hook/initramfs-etc-overlay-hook_0.1.bb b/recipes-initramfs/initramfs-etc-overlay-hook/initramfs-etc-overlay-hook_0.1.bb
new file mode 100644
index 0000000..19e9261
--- /dev/null
+++ b/recipes-initramfs/initramfs-etc-overlay-hook/initramfs-etc-overlay-hook_0.1.bb
@@ -0,0 +1,27 @@
+#
+# CIP Core, generic profile
+#
+# Copyright (c) Siemens AG, 2022
+#
+# Authors:
+#  Jan Kiszka <jan.kiszka@siemens.com>
+#
+# SPDX-License-Identifier: MIT
+#
+
+inherit dpkg-raw
+
+SRC_URI += " \
+    file://etc-overlay.script \
+    "
+
+DEBIAN_DEPENDS = "initramfs-tools"
+
+do_install[cleandirs] += " \
+    ${D}/usr/share/initramfs-tools/hooks \
+    ${D}/usr/share/initramfs-tools/scripts/local-bottom"
+
+do_install() {
+    install -m 0755 "${WORKDIR}/etc-overlay.script" \
+        "${D}/usr/share/initramfs-tools/scripts/local-bottom/etc-overlay"
+}
