diff --git a/handlers/main.yml b/handlers/main.yml
index 3c7d5b01..60704077 100644
--- a/handlers/main.yml
+++ b/handlers/main.yml
@@ -60,6 +60,15 @@
     - "Restart nova services"
     - "venv changed"
 
+# NOTE (noonedeadpunk): Remove this task after Xena release
+- name: Remove obsoleted policy.json
+  file:
+    path: "/etc/nova/policy.json"
+    state: absent
+  listen:
+    - "Restart nova services"
+    - "venv changed"
+
 - name: Start services
   service:
     name: "{{ item.service_name }}"
diff --git a/tasks/nova_post_install.yml b/tasks/nova_post_install.yml
index eed3c8d2..710518ec 100644
--- a/tasks/nova_post_install.yml
+++ b/tasks/nova_post_install.yml
@@ -81,16 +81,26 @@
     - nova-config
     - nova-post-install
 
-- name: Implement policy.json if there are overrides configured
-  copy:
-    content: "{{ nova_policy_overrides | to_nice_json }}"
-    dest: "/etc/nova/policy.json"
+- name: Implement policy.yaml if there are overrides configured
+  config_template:
+    content: "{{ nova_policy_overrides }}"
+    dest: "/etc/nova/policy.yaml"
+    owner: "root"
+    group: "{{ nova_system_group_name }}"
+    mode: "0640"
+    config_type: yaml
   when:
-    - nova_policy_overrides != {}
-  notify:
-    - Manage LB
-    - Restart nova services
-    - Restart uwsgi services
+    - nova_policy_overrides | length > 0
+  tags:
+    - nova-config
+    - nova-policy-override
+
+- name: Remove legacy policy.yaml file
+  file:
+    path: "/etc/nova/policy.yaml"
+    state: absent
+  when:
+    - nova_policy_overrides | length == 0
   tags:
     - nova-config
     - nova-policy-override