diff --git a/changelog/bugfixes/2024-02-06-cloudsigma-remove-custom-cloudinit-service-config.md b/changelog/bugfixes/2024-02-06-cloudsigma-remove-custom-cloudinit-service-config.md
new file mode 100644
index 0000000000..90d7ab894d
--- /dev/null
+++ b/changelog/bugfixes/2024-02-06-cloudsigma-remove-custom-cloudinit-service-config.md
@@ -0,0 +1 @@
+- Removed custom CloudSigma coreos-cloudinit service configuration since it will be called with the cloudsigma oem anyway. The restart of the service can also cause the serial port to be stuck in an nondeterministic state which breaks future runs.
diff --git a/sdk_container/src/third_party/coreos-overlay/coreos-base/oem-cloudsigma/files/cloud-config.yml b/sdk_container/src/third_party/coreos-overlay/coreos-base/oem-cloudsigma/files/cloud-config.yml
index 757796e101..f799bf4b4c 100644
--- a/sdk_container/src/third_party/coreos-overlay/coreos-base/oem-cloudsigma/files/cloud-config.yml
+++ b/sdk_container/src/third_party/coreos-overlay/coreos-base/oem-cloudsigma/files/cloud-config.yml
@@ -1,19 +1,6 @@
 #cloud-config
 
 coreos:
-  units:
-    - name: oem-cloudinit.service
-      command: restart
-      runtime: yes
-      content: |
-        [Unit]
-        Description=Cloudinit from CloudSigma metadata
-
-        [Service]
-        Type=oneshot
-        ExecStartPre=stty -F /dev/ttyS1 raw -echo
-        ExecStart=/usr/bin/coreos-cloudinit --oem=cloudsigma
-
   oem:
     id: cloudsigma
     name: CloudSigma
diff --git a/sdk_container/src/third_party/coreos-overlay/coreos-base/oem-cloudsigma/oem-cloudsigma-0.0.3-r4.ebuild b/sdk_container/src/third_party/coreos-overlay/coreos-base/oem-cloudsigma/oem-cloudsigma-0.0.3-r5.ebuild
similarity index 100%
rename from sdk_container/src/third_party/coreos-overlay/coreos-base/oem-cloudsigma/oem-cloudsigma-0.0.3-r4.ebuild
rename to sdk_container/src/third_party/coreos-overlay/coreos-base/oem-cloudsigma/oem-cloudsigma-0.0.3-r5.ebuild