diff --git a/meta-arm-autonomy/classes/image_types_xenguest.bbclass b/meta-arm-autonomy/classes/image_types_xenguest.bbclass
index ff1e41ab..195d6ed2 100644
--- a/meta-arm-autonomy/classes/image_types_xenguest.bbclass
+++ b/meta-arm-autonomy/classes/image_types_xenguest.bbclass
@@ -1,7 +1,7 @@
 # Create a xenguest image with kernel and filesystem produced by Yocto
 # This will create a .xenguest file that the xenguest-manager can use.
 
-inherit xenguest-image deploy
+inherit xenguest-image
 
 # We are creating our guest in a local subdirectory
 # force the value so that we are not impacted if the user is changing it
@@ -10,9 +10,6 @@ XENGUEST_IMAGE_DEPLOY_DIR = "${WORKDIR}/tmp-xenguest"
 # Name of deployed file (keep standard image name and add .xenguest)
 XENGUEST_IMAGE_DEPLOY ??= "${IMAGE_NAME}"
 
-# Deployed file when building with initramfs
-XENGUEST_IMAGE_INITRAMFS_DEPLOY ??= "Image-initramfs-${MACHINE}"
-
 # Add kernel XENGUEST_IMAGE_KERNEL from DEPLOY_DIR_IMAGE to image
 xenguest_image_add_kernel() {
     srcfile="${1:-}"
@@ -36,20 +33,6 @@ xenguest_image_pack() {
         ${IMGDEPLOYDIR}/${XENGUEST_IMAGE_DEPLOY}.xenguest
 }
 
-# do_deploy is used for initramfs to pack the kernel initramfs in an image
-do_deploy() {
-    # Add kernel
-    xenguest_image_add_kernel
-
-    # Pack the image in deploydir
-    mkdir -p ${DEPLOYDIR}
-    rm -f ${DEPLOYDIR}/${XENGUEST_IMAGE_INITRAMFS_DEPLOY}.xenguest
-    call_xenguest_mkimage pack \
-        ${DEPLOYDIR}/${XENGUEST_IMAGE_INITRAMFS_DEPLOY}.xenguest
-}
-do_deploy[depends] += "${PN}:do_bootimg_xenguest"
-do_deploy[depends] += "virtual/kernel:do_deploy"
-
 #
 # Task finishing the bootimg
 # We need this task to actually create the symlinks
@@ -88,28 +71,24 @@ python __anonymous() {
         rootfs_needed = False
         rootfs_file = ''
         kernel_needed = False
-        initramfs_needed = False
 
         rootfs_file = xenguest_image_rootfs_file(d)
         if rootfs_file:
             rootfs_needed = True
 
-        if d.getVar('XENGUEST_IMAGE_KERNEL'):
+        if d.getVar('XENGUEST_IMAGE_KERNEL') and not d.getVar('INITRAMFS_IMAGE'):
+            # If INITRAMFS_IMAGE is set, even if INITRAMFS_IMAGE_BUNDLE is not
+            # set to 1 to bundle the initramfs with the kernel, kernel.bbclass
+            # is setting a dependency on ${PN}:do_image_complete. We cannot
+            # in this case depend on do_deploy as it would create a circular
+            # dependency:
+            # do_image_complete would depend on kernel:do_deploy which would
+            # depend on ${PN}:do_image_complete
+            # In the case INITRAMFS_IMAGE_BUNDLE = 1, the kernel-xenguest class
+            # will handle the creation of a xenguest image with the kernel.
+            # In the other case the kernel can be added manually to the image.
             kernel_needed = True
 
-        if d.getVar('INITRAMFS_IMAGE'):
-            if int(d.getVar('INITRAMFS_IMAGE_BUNDLE')) != 1:
-                bb.error("xenguest-fstype: INITRAMFS_IMAGE is set but INITRAMFS_IMAGE_BUNDLE is set to 0.\n")
-                bb.fatal("xenguest-fstype: This configuration is not supported by xenguest image type\n")
-            initramfs_needed = True
-
-        if initramfs_needed and rootfs_needed:
-            bb.warn("xenguest-fstype: Final image will use an initramfs kernel and rootfs in disk.\n")
-            bb.warn("xenguest-fstype: rootfs.tar.%s should be removed from XENGUEST_IMAGE_DISK_PARTITIONS.\n")
-
-        if not initramfs_needed and not rootfs_needed and not kernel_needed:
-            bb.warn("xenguest-fstype: Generated image will have no kernel and no rootfs.\n")
-
         bb.build.addtask('do_bootimg_xenguest', 'do_image_complete', None, d)
 
         if rootfs_needed:
@@ -121,12 +100,9 @@ python __anonymous() {
             d.setVar('IMAGE_TYPEDEP_xenguest', 'tar' + (rootfs_file.split('.tar', 1)[1] or ''))
 
         if kernel_needed:
-            if initramfs_needed:
-                bb.build.addtask('do_deploy', 'do_build', None, d)
-            else:
-                # Tell do_bootimg_xenguest to call xenguest_image_add_kernel
-                d.appendVarFlag('do_bootimg_xenguest', 'subtasks', ' xenguest_image_add_kernel')
-                # we will need kernel do_deploy
-                d.appendVarFlag('do_bootimg_xenguest', 'depends', ' virtual/kernel:do_deploy')
+            # Tell do_bootimg_xenguest to call xenguest_image_add_kernel
+            d.appendVarFlag('do_bootimg_xenguest', 'subtasks', ' xenguest_image_add_kernel')
+            # we will need kernel do_deploy
+            d.appendVarFlag('do_bootimg_xenguest', 'depends', ' virtual/kernel:do_deploy')
 }
 
diff --git a/meta-arm-autonomy/classes/kernel-xenguest.bbclass b/meta-arm-autonomy/classes/kernel-xenguest.bbclass
new file mode 100644
index 00000000..a4954aaa
--- /dev/null
+++ b/meta-arm-autonomy/classes/kernel-xenguest.bbclass
@@ -0,0 +1,34 @@
+# Create a xenguest image containing the kernel with initramfs when
+# initramfs is activated
+# This is done using kernel-fitimage as model
+# To activate this, kernel-xenguest must be added to KERNEL_CLASSES
+
+inherit xenguest-image
+
+# use a local copy to pack all together
+XENGUEST_IMAGE_DEPLOY_DIR = "${WORKDIR}/tmp-xenguest"
+
+python __anonymous () {
+    # only if xenguest image type is present
+    if bb.utils.contains('IMAGE_FSTYPES', 'xenguest', '1', '0', d):
+        # only if initramfs bundle is activated
+        if d.getVar('INITRAMFS_IMAGE') and d.getVar('INITRAMFS_IMAGE_BUNDLE') == "1":
+            if not bb.utils.contains('KERNEL_IMAGETYPES', 'Image', '1', '0', d):
+                bb.fatal("xenguest image type with initramfs require Image kernel image type")
+            bb.build.addtask('do_assemble_xenguest_initramfs', 'do_deploy', 'do_bundle_initramfs', d)
+}
+
+do_assemble_xenguest_initramfs() {
+    xenguest_image_clone
+    call_xenguest_mkimage partial --xen-kernel=${B}/${KERNEL_OUTPUT_DIR}/Image.initramfs
+    rm -f ${B}/${KERNEL_OUTPUT_DIR}/Image-initramfs.xenguest
+    call_xenguest_mkimage pack ${B}/${KERNEL_OUTPUT_DIR}/Image-initramfs.xenguest
+}
+do_assemble_xenguest_initramfs[depends] += "${INITRAMFS_IMAGE}:do_image_complete"
+
+kernel_do_deploy_append() {
+    if [ -f "${B}/${KERNEL_OUTPUT_DIR}/Image-initramfs.xenguest" ]; then
+        install -m 0644 ${B}/${KERNEL_OUTPUT_DIR}/Image-initramfs.xenguest "$deployDir/Image-${INITRAMFS_NAME}.xenguest"
+        ln -snf Image-${INITRAMFS_NAME}.xenguest $deployDir/Image-${INITRAMFS_LINK_NAME}.xenguest
+    fi
+}
diff --git a/meta-arm-autonomy/classes/xenguest-image.bbclass b/meta-arm-autonomy/classes/xenguest-image.bbclass
index b4d41222..e8880f3f 100644
--- a/meta-arm-autonomy/classes/xenguest-image.bbclass
+++ b/meta-arm-autonomy/classes/xenguest-image.bbclass
@@ -36,11 +36,8 @@ XENGUEST_IMAGE_EXTRA_CMD ??= ""
 # Kernel binary
 # This value is used by the xenguest image type but is declared here to have
 # all variables in the same place
-# Default value is:
-# - Image if INITRAMFS_IMAGE is not set
-# - Image-initramfs-${MACHINE}.bin if INITRAMFS_IMAGE is set
 # If this value is empty no kernel will be added to the image
-XENGUEST_IMAGE_KERNEL ??= "${@ 'Image' if not d.getVar('INITRAMFS_IMAGE') else 'Image-initramfs-${MACHINE}.bin'}"
+XENGUEST_IMAGE_KERNEL ??= "Image"
 
 # Size of the disk to create (if 0 no disk will be created and rootfs will not
 # be included in the xenguest image)
diff --git a/meta-arm-autonomy/conf/distro/include/arm-autonomy-guest.inc b/meta-arm-autonomy/conf/distro/include/arm-autonomy-guest.inc
index 9b5889e7..16b9f7ea 100644
--- a/meta-arm-autonomy/conf/distro/include/arm-autonomy-guest.inc
+++ b/meta-arm-autonomy/conf/distro/include/arm-autonomy-guest.inc
@@ -7,3 +7,5 @@ DISTRO_FEATURES_append = " ipv4"
 IMAGE_CLASSES += "image_types_xenguest"
 IMAGE_FSTYPES += "xenguest"
 
+# xenguest kernel extension to handle initramfs
+KERNEL_CLASSES += "kernel-xenguest"