diff --git a/build_image b/build_image
index ed8ed5d2be..a5d641db9a 100755
--- a/build_image
+++ b/build_image
@@ -35,6 +35,8 @@ DEFINE_string disk_layout "base" \
   "The disk layout type to use for this image."
 DEFINE_string group "${DEFAULT_GROUP}" \
   "The update group."
+DEFINE_boolean generate_update "${FLAGS_FALSE}" \
+  "Generate update payload. (prod only)"
 
 # include upload options
 . "${BUILD_LIBRARY_DIR}/release_util.sh" || exit 1
@@ -160,15 +162,15 @@ if should_build_image ${COREOS_PRODUCTION_IMAGE_NAME}; then
   copy_image ${CHROMEOS_BASE_IMAGE_NAME} ${COREOS_PRODUCTION_IMAGE_NAME}
   setup_prod_image ${COREOS_PRODUCTION_IMAGE_NAME} ${DISK_LAYOUT}
   upload_image "${BUILD_DIR}/${COREOS_PRODUCTION_IMAGE_NAME}"
+  if [[ ${FLAGS_generate_update} -eq ${FLAGS_TRUE} ]]; then
+    generate_update "${COREOS_PRODUCTION_IMAGE_NAME}" ${DISK_LAYOUT}
+  fi
 fi
 
 if ! should_build_image ${PRISTINE_IMAGE_NAME}; then
   rm -f "${BUILD_DIR}/${PRISTINE_IMAGE_NAME}"
 fi
 
-# Generating AU generator zip file to run outside chroot
-generate_au_zip || echo "Failed generating AU zip file - ignoring Error..."
-
 # Write out a version.txt file, this will be used by image_to_vm.sh
 tee "${BUILD_DIR}/version.txt" <<EOF
 COREOS_BUILD=${COREOS_BUILD}
@@ -177,8 +179,7 @@ COREOS_PATCH=${COREOS_PATCH}
 COREOS_SDK_VERSION=${COREOS_SDK_VERSION}
 EOF
 
-upload_image -d "${BUILD_DIR}/au-generator.zip.DIGESTS" \
-    "${BUILD_DIR}/au-generator.zip" "${BUILD_DIR}/version.txt"
+upload_image "${BUILD_DIR}/version.txt"
 
 # Create a named symlink.
 LINK_NAME="${FLAGS_output_root}/${BOARD}/${FLAGS_symlink}"
diff --git a/build_library/build_image_util.sh b/build_library/build_image_util.sh
index fb46c20975..8502d1ebf2 100755
--- a/build_library/build_image_util.sh
+++ b/build_library/build_image_util.sh
@@ -135,14 +135,28 @@ delete_prompt() {
   fi
 }
 
-generate_au_zip () {
-  local lgenerateauzip="${BUILD_LIBRARY_DIR}/generate_au_zip.py"
-  local largs="-o ${BUILD_DIR}"
-  test ! -d "${BUILD_DIR}" && mkdir -p "${BUILD_DIR}"
-  info "Running ${lgenerateauzip} ${largs} for generating AU updater zip file"
+generate_update() {
+  local image_name="$1"
+  local disk_layout="$2"
+  local update_prefix="${image_name%_image.bin}_update"
+  local update="${BUILD_DIR}/${update_prefix}"
+  local devkey="/usr/share/update_engine/update-payload-key.key.pem"
+
+  echo "Generating update payload, signed with a dev key"
+  "${BUILD_LIBRARY_DIR}/disk_util" --disk_layout="${disk_layout}" \
+    extract "${BUILD_DIR}/${image_name}" "USR-A" "${update}.bin"
+  delta_generator -private_key "${devkey}" \
+    -new_image "${update}.bin" -out_file "${update}.gz"
+  delta_generator -private_key "${devkey}" \
+    -in_file "${update}.gz" -out_metadata "${update}.meta"
+
+  info "Generating update tools zip"
   # Make sure some vars this script needs are exported
   export REPO_MANIFESTS_DIR SCRIPTS_DIR
-  $lgenerateauzip $largs
+  "${BUILD_LIBRARY_DIR}/generate_au_zip.py" \
+    --output-dir "${BUILD_DIR}" --zip-name "${update_prefix}.zip"
+
+  upload_image -d "${update}.DIGESTS" "${update}".{bin,gz,meta,zip}
 }
 
 # Basic command to emerge binary packages into the target image.