diff --git a/client/cmd/testutil.go b/client/cmd/testutil.go
index 988ef8cc0..678072f0b 100644
--- a/client/cmd/testutil.go
+++ b/client/cmd/testutil.go
@@ -81,7 +81,7 @@ func startManagement(t *testing.T, config *mgmt.Config) (*grpc.Server, net.Liste
 		t.Fatal(err)
 	}
 	turnManager := mgmt.NewTimeBasedAuthSecretsManager(peersUpdateManager, config.TURNConfig)
-	mgmtServer, err := mgmt.NewServer(config, accountManager, peersUpdateManager, turnManager, nil)
+	mgmtServer, err := mgmt.NewServer(config, accountManager, peersUpdateManager, turnManager, nil, nil)
 	if err != nil {
 		t.Fatal(err)
 	}
diff --git a/client/internal/engine_test.go b/client/internal/engine_test.go
index 60c07c0c9..d1c46181c 100644
--- a/client/internal/engine_test.go
+++ b/client/internal/engine_test.go
@@ -1054,7 +1054,7 @@ func startManagement(dataDir string) (*grpc.Server, string, error) {
 		return nil, "", err
 	}
 	turnManager := server.NewTimeBasedAuthSecretsManager(peersUpdateManager, config.TURNConfig)
-	mgmtServer, err := server.NewServer(config, accountManager, peersUpdateManager, turnManager, nil)
+	mgmtServer, err := server.NewServer(config, accountManager, peersUpdateManager, turnManager, nil, nil)
 	if err != nil {
 		return nil, "", err
 	}
diff --git a/management/client/client_test.go b/management/client/client_test.go
index d3d99dc85..deef57329 100644
--- a/management/client/client_test.go
+++ b/management/client/client_test.go
@@ -66,7 +66,7 @@ func startManagement(t *testing.T) (*grpc.Server, net.Listener) {
 		t.Fatal(err)
 	}
 	turnManager := mgmt.NewTimeBasedAuthSecretsManager(peersUpdateManager, config.TURNConfig)
-	mgmtServer, err := mgmt.NewServer(config, accountManager, peersUpdateManager, turnManager, nil)
+	mgmtServer, err := mgmt.NewServer(config, accountManager, peersUpdateManager, turnManager, nil, nil)
 	if err != nil {
 		t.Fatal(err)
 	}
diff --git a/management/cmd/management.go b/management/cmd/management.go
index a4d67fc0b..5c3816715 100644
--- a/management/cmd/management.go
+++ b/management/cmd/management.go
@@ -198,8 +198,11 @@ var (
 				return fmt.Errorf("failed creating HTTP API handler: %v", err)
 			}
 
+			ephemeralManager := server.NewEphemeralManager(store, accountManager)
+			ephemeralManager.LoadInitialPeers()
+
 			gRPCAPIHandler := grpc.NewServer(gRPCOpts...)
-			srv, err := server.NewServer(config, accountManager, peersUpdateManager, turnManager, appMetrics)
+			srv, err := server.NewServer(config, accountManager, peersUpdateManager, turnManager, appMetrics, ephemeralManager)
 			if err != nil {
 				return fmt.Errorf("failed creating gRPC API handler: %v", err)
 			}
@@ -268,6 +271,7 @@ var (
 			SetupCloseHandler()
 
 			<-stopCh
+			ephemeralManager.Stop()
 			_ = appMetrics.Close()
 			_ = listener.Close()
 			if certManager != nil {
diff --git a/management/server/account.go b/management/server/account.go
index d9b73f713..26aeed3c5 100644
--- a/management/server/account.go
+++ b/management/server/account.go
@@ -49,7 +49,7 @@ func cacheEntryExpiration() time.Duration {
 type AccountManager interface {
 	GetOrCreateAccountByUser(userId, domain string) (*Account, error)
 	CreateSetupKey(accountID string, keyName string, keyType SetupKeyType, expiresIn time.Duration,
-		autoGroups []string, usageLimit int, userID string) (*SetupKey, error)
+		autoGroups []string, usageLimit int, userID string, ephemeral bool) (*SetupKey, error)
 	SaveSetupKey(accountID string, key *SetupKey, userID string) (*SetupKey, error)
 	CreateUser(accountID, initiatorUserID string, key *UserInfo) (*UserInfo, error)
 	DeleteUser(accountID, initiatorUserID string, targetUserID string) error
diff --git a/management/server/account_test.go b/management/server/account_test.go
index 29af8514a..6002b7a3a 100644
--- a/management/server/account_test.go
+++ b/management/server/account_test.go
@@ -12,6 +12,7 @@ import (
 	"time"
 
 	"github.com/golang-jwt/jwt"
+
 	nbdns "github.com/netbirdio/netbird/dns"
 	"github.com/netbirdio/netbird/management/server/activity"
 	"github.com/netbirdio/netbird/route"
@@ -782,7 +783,7 @@ func TestAccountManager_AddPeer(t *testing.T) {
 
 	serial := account.Network.CurrentSerial() // should be 0
 
-	setupKey, err := manager.CreateSetupKey(account.Id, "test-key", SetupKeyReusable, time.Hour, nil, 999, userID)
+	setupKey, err := manager.CreateSetupKey(account.Id, "test-key", SetupKeyReusable, time.Hour, nil, 999, userID, false)
 	if err != nil {
 		return
 	}
@@ -929,7 +930,7 @@ func TestAccountManager_NetworkUpdates(t *testing.T) {
 		t.Fatal(err)
 	}
 
-	setupKey, err := manager.CreateSetupKey(account.Id, "test-key", SetupKeyReusable, time.Hour, nil, 999, userID)
+	setupKey, err := manager.CreateSetupKey(account.Id, "test-key", SetupKeyReusable, time.Hour, nil, 999, userID, false)
 	if err != nil {
 		return
 	}
@@ -1113,7 +1114,7 @@ func TestAccountManager_DeletePeer(t *testing.T) {
 		t.Fatal(err)
 	}
 
-	setupKey, err := manager.CreateSetupKey(account.Id, "test-key", SetupKeyReusable, time.Hour, nil, 999, userID)
+	setupKey, err := manager.CreateSetupKey(account.Id, "test-key", SetupKeyReusable, time.Hour, nil, 999, userID, false)
 	if err != nil {
 		return
 	}
diff --git a/management/server/activity/event.go b/management/server/activity/event.go
index 668449176..17ec4a0b0 100644
--- a/management/server/activity/event.go
+++ b/management/server/activity/event.go
@@ -4,6 +4,10 @@ import (
 	"time"
 )
 
+const (
+	SystemInitiator = "sys"
+)
+
 // Event represents a network/system activity event.
 type Event struct {
 	// Timestamp of the event
diff --git a/management/server/ephemeral.go b/management/server/ephemeral.go
new file mode 100644
index 000000000..a7b423983
--- /dev/null
+++ b/management/server/ephemeral.go
@@ -0,0 +1,224 @@
+package server
+
+import (
+	"sync"
+	"time"
+
+	log "github.com/sirupsen/logrus"
+
+	"github.com/netbirdio/netbird/management/server/activity"
+)
+
+const (
+	ephemeralLifeTime = 10 * time.Minute
+)
+
+var (
+	timeNow = time.Now
+)
+
+type ephemeralPeer struct {
+	id       string
+	account  *Account
+	deadline time.Time
+	next     *ephemeralPeer
+}
+
+// todo: consider to remove peer from ephemeral list when the peer has been deleted via API. If we do not do it
+// in worst case we will get invalid error message in this manager.
+
+// EphemeralManager keep a list of ephemeral peers. After ephemeralLifeTime inactivity the peer will be deleted
+// automatically. Inactivity means the peer disconnected from the Management server.
+type EphemeralManager struct {
+	store          Store
+	accountManager AccountManager
+
+	headPeer  *ephemeralPeer
+	tailPeer  *ephemeralPeer
+	peersLock sync.Mutex
+	timer     *time.Timer
+}
+
+// NewEphemeralManager instantiate new EphemeralManager
+func NewEphemeralManager(store Store, accountManager AccountManager) *EphemeralManager {
+	return &EphemeralManager{
+		store:          store,
+		accountManager: accountManager,
+	}
+}
+
+// LoadInitialPeers load from the database the ephemeral type of peers and schedule a cleanup procedure to the head
+// of the linked list (to the most deprecated peer). At the end of cleanup it schedules the next cleanup to the new
+// head.
+func (e *EphemeralManager) LoadInitialPeers() {
+	e.peersLock.Lock()
+	defer e.peersLock.Unlock()
+
+	e.loadEphemeralPeers()
+	if e.headPeer != nil {
+		e.timer = time.AfterFunc(ephemeralLifeTime, e.cleanup)
+	}
+}
+
+// Stop timer
+func (e *EphemeralManager) Stop() {
+	e.peersLock.Lock()
+	defer e.peersLock.Unlock()
+
+	if e.timer != nil {
+		e.timer.Stop()
+	}
+}
+
+// OnPeerConnected remove the peer from the linked list of ephemeral peers. Because it has been called when the peer
+// is active the manager will not delete it while it is active.
+func (e *EphemeralManager) OnPeerConnected(peer *Peer) {
+	if !peer.Ephemeral {
+		return
+	}
+
+	log.Tracef("remove peer from ephemeral list: %s", peer.ID)
+
+	e.peersLock.Lock()
+	defer e.peersLock.Unlock()
+
+	e.removePeer(peer.ID)
+
+	// stop the unnecessary timer
+	if e.headPeer == nil && e.timer != nil {
+		e.timer.Stop()
+		e.timer = nil
+	}
+}
+
+// OnPeerDisconnected add the peer to the linked list of ephemeral peers. Because of the peer
+// is inactive it will be deleted after the ephemeralLifeTime period.
+func (e *EphemeralManager) OnPeerDisconnected(peer *Peer) {
+	if !peer.Ephemeral {
+		return
+	}
+
+	log.Tracef("add peer to ephemeral list: %s", peer.ID)
+
+	a, err := e.store.GetAccountByPeerID(peer.ID)
+	if err != nil {
+		log.Errorf("failed to add peer to ephemeral list: %s", err)
+		return
+	}
+
+	e.peersLock.Lock()
+	defer e.peersLock.Unlock()
+
+	if e.isPeerOnList(peer.ID) {
+		return
+	}
+
+	e.addPeer(peer.ID, a, newDeadLine())
+	if e.timer == nil {
+		e.timer = time.AfterFunc(e.headPeer.deadline.Sub(timeNow()), e.cleanup)
+	}
+}
+
+func (e *EphemeralManager) loadEphemeralPeers() {
+	accounts := e.store.GetAllAccounts()
+	t := newDeadLine()
+	count := 0
+	for _, a := range accounts {
+		for id, p := range a.Peers {
+			if p.Ephemeral {
+				count++
+				e.addPeer(id, a, t)
+			}
+		}
+	}
+	log.Debugf("loaded ephemeral peer(s): %d", count)
+}
+
+func (e *EphemeralManager) cleanup() {
+	log.Tracef("on ephemeral cleanup")
+	deletePeers := make(map[string]*ephemeralPeer)
+
+	e.peersLock.Lock()
+	now := timeNow()
+	for p := e.headPeer; p != nil; p = p.next {
+		if now.Before(p.deadline) {
+			break
+		}
+
+		deletePeers[p.id] = p
+		e.headPeer = p.next
+		if p.next == nil {
+			e.tailPeer = nil
+		}
+	}
+
+	if e.headPeer != nil {
+		e.timer = time.AfterFunc(e.headPeer.deadline.Sub(timeNow()), e.cleanup)
+	} else {
+		e.timer = nil
+	}
+
+	e.peersLock.Unlock()
+
+	for id, p := range deletePeers {
+		log.Debugf("delete ephemeral peer: %s", id)
+		_, err := e.accountManager.DeletePeer(p.account.Id, id, activity.SystemInitiator)
+		if err != nil {
+			log.Tracef("failed to delete ephemeral peer: %s", err)
+		}
+	}
+}
+
+func (e *EphemeralManager) addPeer(id string, account *Account, deadline time.Time) {
+	ep := &ephemeralPeer{
+		id:       id,
+		account:  account,
+		deadline: deadline,
+	}
+
+	if e.headPeer == nil {
+		e.headPeer = ep
+	}
+	if e.tailPeer != nil {
+		e.tailPeer.next = ep
+	}
+	e.tailPeer = ep
+}
+
+func (e *EphemeralManager) removePeer(id string) {
+	if e.headPeer == nil {
+		return
+	}
+
+	if e.headPeer.id == id {
+		e.headPeer = e.headPeer.next
+		if e.tailPeer.id == id {
+			e.tailPeer = nil
+		}
+		return
+	}
+
+	for p := e.headPeer; p.next != nil; p = p.next {
+		if p.next.id == id {
+			// if we remove the last element from the chain then set the last-1 as tail
+			if e.tailPeer.id == id {
+				e.tailPeer = p
+			}
+			p.next = p.next.next
+			return
+		}
+	}
+}
+
+func (e *EphemeralManager) isPeerOnList(id string) bool {
+	for p := e.headPeer; p != nil; p = p.next {
+		if p.id == id {
+			return true
+		}
+	}
+	return false
+}
+
+func newDeadLine() time.Time {
+	return timeNow().Add(ephemeralLifeTime)
+}
diff --git a/management/server/ephemeral_test.go b/management/server/ephemeral_test.go
new file mode 100644
index 000000000..554d2a028
--- /dev/null
+++ b/management/server/ephemeral_test.go
@@ -0,0 +1,142 @@
+package server
+
+import (
+	"fmt"
+	"testing"
+	"time"
+)
+
+type MockStore struct {
+	Store
+	account *Account
+}
+
+func (s *MockStore) GetAllAccounts() []*Account {
+	return []*Account{s.account}
+}
+
+func (s *MockStore) GetAccountByPeerID(peerId string) (*Account, error) {
+	_, ok := s.account.Peers[peerId]
+	if ok {
+		return s.account, nil
+	}
+
+	return nil, fmt.Errorf("account not found")
+}
+
+type MocAccountManager struct {
+	AccountManager
+	store *MockStore
+}
+
+func (a MocAccountManager) DeletePeer(accountID, peerID, userID string) (*Peer, error) {
+	delete(a.store.account.Peers, peerID)
+	return nil, nil
+}
+
+func TestNewManager(t *testing.T) {
+	startTime := time.Now()
+	timeNow = func() time.Time {
+		return startTime
+	}
+
+	store := &MockStore{}
+	am := MocAccountManager{
+		store: store,
+	}
+
+	numberOfPeers := 5
+	numberOfEphemeralPeers := 3
+	seedPeers(store, numberOfPeers, numberOfEphemeralPeers)
+
+	mgr := NewEphemeralManager(store, am)
+	mgr.loadEphemeralPeers()
+	startTime = startTime.Add(ephemeralLifeTime + 1)
+	mgr.cleanup()
+
+	if len(store.account.Peers) != numberOfPeers {
+		t.Errorf("failed to cleanup ephemeral peers, expected: %d, result: %d", numberOfPeers, len(store.account.Peers))
+	}
+}
+
+func TestNewManagerPeerConnected(t *testing.T) {
+	startTime := time.Now()
+	timeNow = func() time.Time {
+		return startTime
+	}
+
+	store := &MockStore{}
+	am := MocAccountManager{
+		store: store,
+	}
+
+	numberOfPeers := 5
+	numberOfEphemeralPeers := 3
+	seedPeers(store, numberOfPeers, numberOfEphemeralPeers)
+
+	mgr := NewEphemeralManager(store, am)
+	mgr.loadEphemeralPeers()
+	mgr.OnPeerConnected(store.account.Peers["ephemeral_peer_0"])
+
+	startTime = startTime.Add(ephemeralLifeTime + 1)
+	mgr.cleanup()
+
+	expected := numberOfPeers + 1
+	if len(store.account.Peers) != expected {
+		t.Errorf("failed to cleanup ephemeral peers, expected: %d, result: %d", expected, len(store.account.Peers))
+	}
+}
+
+func TestNewManagerPeerDisconnected(t *testing.T) {
+	startTime := time.Now()
+	timeNow = func() time.Time {
+		return startTime
+	}
+
+	store := &MockStore{}
+	am := MocAccountManager{
+		store: store,
+	}
+
+	numberOfPeers := 5
+	numberOfEphemeralPeers := 3
+	seedPeers(store, numberOfPeers, numberOfEphemeralPeers)
+
+	mgr := NewEphemeralManager(store, am)
+	mgr.loadEphemeralPeers()
+	for _, v := range store.account.Peers {
+		mgr.OnPeerConnected(v)
+
+	}
+	mgr.OnPeerDisconnected(store.account.Peers["ephemeral_peer_0"])
+
+	startTime = startTime.Add(ephemeralLifeTime + 1)
+	mgr.cleanup()
+
+	expected := numberOfPeers + numberOfEphemeralPeers - 1
+	if len(store.account.Peers) != expected {
+		t.Errorf("failed to cleanup ephemeral peers, expected: %d, result: %d", expected, len(store.account.Peers))
+	}
+}
+
+func seedPeers(store *MockStore, numberOfPeers int, numberOfEphemeralPeers int) {
+	store.account = newAccountWithId("my account", "", "")
+
+	for i := 0; i < numberOfPeers; i++ {
+		peerId := fmt.Sprintf("peer_%d", i)
+		p := &Peer{
+			ID:        peerId,
+			Ephemeral: false,
+		}
+		store.account.Peers[p.ID] = p
+	}
+
+	for i := 0; i < numberOfEphemeralPeers; i++ {
+		peerId := fmt.Sprintf("ephemeral_peer_%d", i)
+		p := &Peer{
+			ID:        peerId,
+			Ephemeral: true,
+		}
+		store.account.Peers[p.ID] = p
+	}
+}
diff --git a/management/server/grpcserver.go b/management/server/grpcserver.go
index 94cb1de9d..32b553f9b 100644
--- a/management/server/grpcserver.go
+++ b/management/server/grpcserver.go
@@ -7,11 +7,6 @@ import (
 	"time"
 
 	pb "github.com/golang/protobuf/proto" // nolint
-
-	"github.com/netbirdio/netbird/management/server/telemetry"
-
-	"github.com/netbirdio/netbird/management/server/jwtclaims"
-
 	"github.com/golang/protobuf/ptypes/timestamp"
 	log "github.com/sirupsen/logrus"
 	"golang.zx2c4.com/wireguard/wgctrl/wgtypes"
@@ -21,7 +16,9 @@ import (
 
 	"github.com/netbirdio/netbird/encryption"
 	"github.com/netbirdio/netbird/management/proto"
+	"github.com/netbirdio/netbird/management/server/jwtclaims"
 	internalStatus "github.com/netbirdio/netbird/management/server/status"
+	"github.com/netbirdio/netbird/management/server/telemetry"
 )
 
 // GRPCServer an instance of a Management gRPC API server
@@ -35,12 +32,11 @@ type GRPCServer struct {
 	jwtValidator           *jwtclaims.JWTValidator
 	jwtClaimsExtractor     *jwtclaims.ClaimsExtractor
 	appMetrics             telemetry.AppMetrics
+	ephemeralManager       *EphemeralManager
 }
 
 // NewServer creates a new Management server
-func NewServer(config *Config, accountManager AccountManager, peersUpdateManager *PeersUpdateManager,
-	turnCredentialsManager TURNCredentialsManager, appMetrics telemetry.AppMetrics,
-) (*GRPCServer, error) {
+func NewServer(config *Config, accountManager AccountManager, peersUpdateManager *PeersUpdateManager, turnCredentialsManager TURNCredentialsManager, appMetrics telemetry.AppMetrics, ephemeralManager *EphemeralManager) (*GRPCServer, error) {
 	key, err := wgtypes.GeneratePrivateKey()
 	if err != nil {
 		return nil, err
@@ -92,6 +88,7 @@ func NewServer(config *Config, accountManager AccountManager, peersUpdateManager
 		jwtValidator:           jwtValidator,
 		jwtClaimsExtractor:     jwtClaimsExtractor,
 		appMetrics:             appMetrics,
+		ephemeralManager:       ephemeralManager,
 	}, nil
 }
 
@@ -141,6 +138,9 @@ func (s *GRPCServer) Sync(req *proto.EncryptedMessage, srv proto.ManagementServi
 	}
 
 	updates := s.peersUpdateManager.CreateChannel(peer.ID)
+
+	s.ephemeralManager.OnPeerConnected(peer)
+
 	err = s.accountManager.MarkPeerConnected(peerKey.String(), true)
 	if err != nil {
 		log.Warnf("failed marking peer as connected %s %v", peerKey, err)
@@ -168,6 +168,7 @@ func (s *GRPCServer) Sync(req *proto.EncryptedMessage, srv proto.ManagementServi
 
 			encryptedResp, err := encryption.EncryptMessage(peerKey, s.wgKey, update.Update)
 			if err != nil {
+				s.cancelPeerRoutines(peer)
 				return status.Errorf(codes.Internal, "failed processing update message")
 			}
 
@@ -176,6 +177,7 @@ func (s *GRPCServer) Sync(req *proto.EncryptedMessage, srv proto.ManagementServi
 				Body:     encryptedResp,
 			})
 			if err != nil {
+				s.cancelPeerRoutines(peer)
 				return status.Errorf(codes.Internal, "failed sending update message")
 			}
 			log.Debugf("sent an update to peer %s", peerKey.String())
@@ -193,6 +195,7 @@ func (s *GRPCServer) cancelPeerRoutines(peer *Peer) {
 	s.peersUpdateManager.CloseChannel(peer.ID)
 	s.turnCredentialsManager.CancelRefresh(peer.ID)
 	_ = s.accountManager.MarkPeerConnected(peer.Key, false)
+	s.ephemeralManager.OnPeerDisconnected(peer)
 }
 
 func (s *GRPCServer) validateToken(jwtToken string) (string, error) {
@@ -318,11 +321,17 @@ func (s *GRPCServer) Login(ctx context.Context, req *proto.EncryptedMessage) (*p
 		UserID:          userID,
 		SetupKey:        loginReq.GetSetupKey(),
 	})
+
 	if err != nil {
 		log.Warnf("failed logging in peer %s", peerKey)
 		return nil, mapError(err)
 	}
 
+	// if the login request contains setup key then it is a registration request
+	if loginReq.GetSetupKey() != "" {
+		s.ephemeralManager.OnPeerDisconnected(peer)
+	}
+
 	// if peer has reached this point then it has logged in
 	loginResp := &proto.LoginResponse{
 		WiretrusteeConfig: toWiretrusteeConfig(s.config, nil),
diff --git a/management/server/http/api/openapi.yml b/management/server/http/api/openapi.yml
index a09b9f6a6..06da0ede3 100644
--- a/management/server/http/api/openapi.yml
+++ b/management/server/http/api/openapi.yml
@@ -350,6 +350,10 @@ components:
           description: A number of times this key can be used. The value of 0 indicates the unlimited usage.
           type: integer
           example: 0
+        ephemeral:
+          description: Indicate that the peer will be ephemeral or not
+          type: boolean
+          example: true
       required:
         - id
         - key
@@ -364,6 +368,7 @@ components:
         - auto_groups
         - updated_at
         - usage_limit
+        - ephemeral
     SetupKeyRequest:
       type: object
       properties:
@@ -395,6 +400,10 @@ components:
           description: A number of times this key can be used. The value of 0 indicates the unlimited usage.
           type: integer
           example: 0
+        ephemeral:
+          description: Indicate that the peer will be ephemeral or not
+          type: boolean
+          example: true
       required:
         - name
         - type
diff --git a/management/server/http/api/types.gen.go b/management/server/http/api/types.gen.go
index 5b629cc0e..402aae635 100644
--- a/management/server/http/api/types.gen.go
+++ b/management/server/http/api/types.gen.go
@@ -689,6 +689,9 @@ type SetupKey struct {
 	// AutoGroups List of group IDs to auto-assign to peers registered with this key
 	AutoGroups []string `json:"auto_groups"`
 
+	// Ephemeral Indicate that the peer will be ephemeral or not
+	Ephemeral bool `json:"ephemeral"`
+
 	// Expires Setup Key expiration date
 	Expires time.Time `json:"expires"`
 
@@ -731,6 +734,9 @@ type SetupKeyRequest struct {
 	// AutoGroups List of group IDs to auto-assign to peers registered with this key
 	AutoGroups []string `json:"auto_groups"`
 
+	// Ephemeral Indicate that the peer will be ephemeral or not
+	Ephemeral *bool `json:"ephemeral,omitempty"`
+
 	// ExpiresIn Expiration time in seconds
 	ExpiresIn int `json:"expires_in"`
 
diff --git a/management/server/http/setupkeys_handler.go b/management/server/http/setupkeys_handler.go
index 58a3c1091..392cebdbd 100644
--- a/management/server/http/setupkeys_handler.go
+++ b/management/server/http/setupkeys_handler.go
@@ -71,8 +71,12 @@ func (h *SetupKeysHandler) CreateSetupKey(w http.ResponseWriter, r *http.Request
 		req.AutoGroups = []string{}
 	}
 
+	var ephemeral bool
+	if req.Ephemeral != nil {
+		ephemeral = *req.Ephemeral
+	}
 	setupKey, err := h.accountManager.CreateSetupKey(account.Id, req.Name, server.SetupKeyType(req.Type), expiresIn,
-		req.AutoGroups, req.UsageLimit, user.Id)
+		req.AutoGroups, req.UsageLimit, user.Id, ephemeral)
 	if err != nil {
 		util.WriteError(err, w)
 		return
diff --git a/management/server/http/setupkeys_handler_test.go b/management/server/http/setupkeys_handler_test.go
index 4a5a9af62..afc9deb15 100644
--- a/management/server/http/setupkeys_handler_test.go
+++ b/management/server/http/setupkeys_handler_test.go
@@ -51,7 +51,7 @@ func initSetupKeysTestMetaData(defaultKey *server.SetupKey, newKey *server.Setup
 				}, user, nil
 			},
 			CreateSetupKeyFunc: func(_ string, keyName string, typ server.SetupKeyType, _ time.Duration, _ []string,
-				_ int, _ string,
+				_ int, _ string, _ bool,
 			) (*server.SetupKey, error) {
 				if keyName == newKey.Name || typ != newKey.Type {
 					return newKey, nil
@@ -99,7 +99,7 @@ func TestSetupKeysHandlers(t *testing.T) {
 	adminUser := server.NewAdminUser("test_user")
 
 	newSetupKey := server.GenerateSetupKey(newSetupKeyName, server.SetupKeyReusable, 0, []string{"group-1"},
-		server.SetupKeyUnlimitedUsage)
+		server.SetupKeyUnlimitedUsage, false)
 	updatedDefaultSetupKey := defaultSetupKey.Copy()
 	updatedDefaultSetupKey.AutoGroups = []string{"group-1"}
 	updatedDefaultSetupKey.Name = updatedSetupKeyName
diff --git a/management/server/management_proto_test.go b/management/server/management_proto_test.go
index 6855c84bd..792d05187 100644
--- a/management/server/management_proto_test.go
+++ b/management/server/management_proto_test.go
@@ -422,7 +422,9 @@ func startManagement(t *testing.T, config *Config) (*grpc.Server, string, error)
 		return nil, "", err
 	}
 	turnManager := NewTimeBasedAuthSecretsManager(peersUpdateManager, config.TURNConfig)
-	mgmtServer, err := NewServer(config, accountManager, peersUpdateManager, turnManager, nil)
+
+	ephemeralMgr := NewEphemeralManager(store, accountManager)
+	mgmtServer, err := NewServer(config, accountManager, peersUpdateManager, turnManager, nil, ephemeralMgr)
 	if err != nil {
 		return nil, "", err
 	}
diff --git a/management/server/management_test.go b/management/server/management_test.go
index 7af2535f8..6c93765f4 100644
--- a/management/server/management_test.go
+++ b/management/server/management_test.go
@@ -508,7 +508,7 @@ func startServer(config *server.Config) (*grpc.Server, net.Listener) {
 		log.Fatalf("failed creating a manager: %v", err)
 	}
 	turnManager := server.NewTimeBasedAuthSecretsManager(peersUpdateManager, config.TURNConfig)
-	mgmtServer, err := server.NewServer(config, accountManager, peersUpdateManager, turnManager, nil)
+	mgmtServer, err := server.NewServer(config, accountManager, peersUpdateManager, turnManager, nil, nil)
 	Expect(err).NotTo(HaveOccurred())
 	mgmtProto.RegisterManagementServiceServer(s, mgmtServer)
 	go func() {
diff --git a/management/server/mock_server/account_mock.go b/management/server/mock_server/account_mock.go
index eb31d2a79..4bfa922c7 100644
--- a/management/server/mock_server/account_mock.go
+++ b/management/server/mock_server/account_mock.go
@@ -16,7 +16,7 @@ import (
 type MockAccountManager struct {
 	GetOrCreateAccountByUserFunc func(userId, domain string) (*server.Account, error)
 	CreateSetupKeyFunc           func(accountId string, keyName string, keyType server.SetupKeyType,
-		expiresIn time.Duration, autoGroups []string, usageLimit int, userID string) (*server.SetupKey, error)
+		expiresIn time.Duration, autoGroups []string, usageLimit int, userID string, ephemeral bool) (*server.SetupKey, error)
 	GetSetupKeyFunc                 func(accountID, userID, keyID string) (*server.SetupKey, error)
 	GetAccountByUserOrAccountIdFunc func(userId, accountId, domain string) (*server.Account, error)
 	GetUserFunc                     func(claims jwtclaims.AuthorizationClaims) (*server.User, error)
@@ -122,9 +122,10 @@ func (am *MockAccountManager) CreateSetupKey(
 	autoGroups []string,
 	usageLimit int,
 	userID string,
+	ephemeral bool,
 ) (*server.SetupKey, error) {
 	if am.CreateSetupKeyFunc != nil {
-		return am.CreateSetupKeyFunc(accountID, keyName, keyType, expiresIn, autoGroups, usageLimit, userID)
+		return am.CreateSetupKeyFunc(accountID, keyName, keyType, expiresIn, autoGroups, usageLimit, userID, ephemeral)
 	}
 	return nil, status.Errorf(codes.Unimplemented, "method CreateSetupKey is not implemented")
 }
diff --git a/management/server/peer.go b/management/server/peer.go
index 90377b1e8..f9631719f 100644
--- a/management/server/peer.go
+++ b/management/server/peer.go
@@ -99,6 +99,8 @@ type Peer struct {
 	LoginExpirationEnabled bool
 	// LastLogin the time when peer performed last login operation
 	LastLogin time.Time
+	// Indicate ephemeral peer attribute
+	Ephemeral bool
 }
 
 // AddedWithSSOLogin indicates whether this peer has been added with an SSO login by a user.
@@ -126,6 +128,7 @@ func (p *Peer) Copy() *Peer {
 		SSHEnabled:             p.SSHEnabled,
 		LoginExpirationEnabled: p.LoginExpirationEnabled,
 		LastLogin:              p.LastLogin,
+		Ephemeral:              p.Ephemeral,
 	}
 }
 
@@ -514,6 +517,7 @@ func (am *DefaultAccountManager) AddPeer(setupKey, userID string, peer *Peer) (*
 		AccountID: account.Id,
 	}
 
+	var ephemeral bool
 	if !addedByUser {
 		// validate the setup key if adding with a key
 		sk, err := account.FindSetupKey(upperKey)
@@ -528,6 +532,7 @@ func (am *DefaultAccountManager) AddPeer(setupKey, userID string, peer *Peer) (*
 		account.SetupKeys[sk.Key] = sk.IncrementUsage()
 		opEvent.InitiatorID = sk.Id
 		opEvent.Activity = activity.PeerAddedWithSetupKey
+		ephemeral = sk.Ephemeral
 	} else {
 		opEvent.InitiatorID = userID
 		opEvent.Activity = activity.PeerAddedByUser
@@ -562,6 +567,7 @@ func (am *DefaultAccountManager) AddPeer(setupKey, userID string, peer *Peer) (*
 		SSHKey:                 peer.SSHKey,
 		LastLogin:              time.Now().UTC(),
 		LoginExpirationEnabled: addedByUser,
+		Ephemeral:              ephemeral,
 	}
 
 	// add peer to 'All' group
diff --git a/management/server/peer_test.go b/management/server/peer_test.go
index 875aaeaba..822856e6a 100644
--- a/management/server/peer_test.go
+++ b/management/server/peer_test.go
@@ -78,7 +78,7 @@ func TestAccountManager_GetNetworkMap(t *testing.T) {
 		t.Fatal(err)
 	}
 
-	setupKey, err := manager.CreateSetupKey(account.Id, "test-key", SetupKeyReusable, time.Hour, nil, 999, userId)
+	setupKey, err := manager.CreateSetupKey(account.Id, "test-key", SetupKeyReusable, time.Hour, nil, 999, userId, false)
 	if err != nil {
 		return
 	}
@@ -331,7 +331,7 @@ func TestAccountManager_GetPeerNetwork(t *testing.T) {
 		t.Fatal(err)
 	}
 
-	setupKey, err := manager.CreateSetupKey(account.Id, "test-key", SetupKeyReusable, time.Hour, nil, 999, userId)
+	setupKey, err := manager.CreateSetupKey(account.Id, "test-key", SetupKeyReusable, time.Hour, nil, 999, userId, false)
 	if err != nil {
 		return
 	}
@@ -405,7 +405,7 @@ func TestDefaultAccountManager_GetPeer(t *testing.T) {
 	}
 
 	// two peers one added by a regular user and one with a setup key
-	setupKey, err := manager.CreateSetupKey(account.Id, "test-key", SetupKeyReusable, time.Hour, nil, 999, adminUser)
+	setupKey, err := manager.CreateSetupKey(account.Id, "test-key", SetupKeyReusable, time.Hour, nil, 999, adminUser, false)
 	if err != nil {
 		return
 	}
diff --git a/management/server/setupkey.go b/management/server/setupkey.go
index ffdd822e3..e857230a5 100644
--- a/management/server/setupkey.go
+++ b/management/server/setupkey.go
@@ -86,6 +86,8 @@ type SetupKey struct {
 	// UsageLimit indicates the number of times this key can be used to enroll a machine.
 	// The value of 0 indicates the unlimited usage.
 	UsageLimit int
+	// Ephemeral indicate if the peers will be ephemeral or not
+	Ephemeral bool
 }
 
 // Copy copies SetupKey to a new object
@@ -108,6 +110,7 @@ func (key *SetupKey) Copy() *SetupKey {
 		LastUsed:   key.LastUsed,
 		AutoGroups: autoGroups,
 		UsageLimit: key.UsageLimit,
+		Ephemeral:  key.Ephemeral,
 	}
 }
 
@@ -162,7 +165,7 @@ func (key *SetupKey) IsOverUsed() bool {
 
 // GenerateSetupKey generates a new setup key
 func GenerateSetupKey(name string, t SetupKeyType, validFor time.Duration, autoGroups []string,
-	usageLimit int) *SetupKey {
+	usageLimit int, ephemeral bool) *SetupKey {
 	key := strings.ToUpper(uuid.New().String())
 	limit := usageLimit
 	if t == SetupKeyOneOff {
@@ -180,13 +183,14 @@ func GenerateSetupKey(name string, t SetupKeyType, validFor time.Duration, autoG
 		UsedTimes:  0,
 		AutoGroups: autoGroups,
 		UsageLimit: limit,
+		Ephemeral:  ephemeral,
 	}
 }
 
 // GenerateDefaultSetupKey generates a default reusable setup key with an unlimited usage and 30 days expiration
 func GenerateDefaultSetupKey() *SetupKey {
 	return GenerateSetupKey(DefaultSetupKeyName, SetupKeyReusable, DefaultSetupKeyDuration, []string{},
-		SetupKeyUnlimitedUsage)
+		SetupKeyUnlimitedUsage, false)
 }
 
 func Hash(s string) uint32 {
@@ -201,7 +205,7 @@ func Hash(s string) uint32 {
 // CreateSetupKey generates a new setup key with a given name, type, list of groups IDs to auto-assign to peers registered with this key,
 // and adds it to the specified account. A list of autoGroups IDs can be empty.
 func (am *DefaultAccountManager) CreateSetupKey(accountID string, keyName string, keyType SetupKeyType,
-	expiresIn time.Duration, autoGroups []string, usageLimit int, userID string) (*SetupKey, error) {
+	expiresIn time.Duration, autoGroups []string, usageLimit int, userID string, ephemeral bool) (*SetupKey, error) {
 	unlock := am.Store.AcquireAccountLock(accountID)
 	defer unlock()
 
@@ -221,7 +225,7 @@ func (am *DefaultAccountManager) CreateSetupKey(accountID string, keyName string
 		}
 	}
 
-	setupKey := GenerateSetupKey(keyName, keyType, keyDuration, autoGroups, usageLimit)
+	setupKey := GenerateSetupKey(keyName, keyType, keyDuration, autoGroups, usageLimit, ephemeral)
 	account.SetupKeys[setupKey.Key] = setupKey
 	err = am.Store.SaveAccount(account)
 	if err != nil {
diff --git a/management/server/setupkey_test.go b/management/server/setupkey_test.go
index a6f318ab9..6da01bd82 100644
--- a/management/server/setupkey_test.go
+++ b/management/server/setupkey_test.go
@@ -37,7 +37,7 @@ func TestDefaultAccountManager_SaveSetupKey(t *testing.T) {
 	keyName := "my-test-key"
 
 	key, err := manager.CreateSetupKey(account.Id, keyName, SetupKeyReusable, expiresIn, []string{},
-		SetupKeyUnlimitedUsage, userID)
+		SetupKeyUnlimitedUsage, userID, false)
 	if err != nil {
 		t.Fatal(err)
 	}
@@ -136,7 +136,7 @@ func TestDefaultAccountManager_CreateSetupKey(t *testing.T) {
 	for _, tCase := range []testCase{testCase1, testCase2} {
 		t.Run(tCase.name, func(t *testing.T) {
 			key, err := manager.CreateSetupKey(account.Id, tCase.expectedKeyName, SetupKeyReusable, expiresIn,
-				tCase.expectedGroups, SetupKeyUnlimitedUsage, userID)
+				tCase.expectedGroups, SetupKeyUnlimitedUsage, userID, false)
 
 			if tCase.expectedFailure {
 				if err == nil {
@@ -193,7 +193,7 @@ func TestGenerateSetupKey(t *testing.T) {
 	expectedUpdatedAt := time.Now().UTC()
 	var expectedAutoGroups []string
 
-	key := GenerateSetupKey(expectedName, SetupKeyOneOff, time.Hour, []string{}, SetupKeyUnlimitedUsage)
+	key := GenerateSetupKey(expectedName, SetupKeyOneOff, time.Hour, []string{}, SetupKeyUnlimitedUsage, false)
 
 	assertKey(t, key, expectedName, expectedRevoke, expectedType, expectedUsedTimes, expectedCreatedAt,
 		expectedExpiresAt, strconv.Itoa(int(Hash(key.Key))), expectedUpdatedAt, expectedAutoGroups)
@@ -201,33 +201,33 @@ func TestGenerateSetupKey(t *testing.T) {
 }
 
 func TestSetupKey_IsValid(t *testing.T) {
-	validKey := GenerateSetupKey("valid key", SetupKeyOneOff, time.Hour, []string{}, SetupKeyUnlimitedUsage)
+	validKey := GenerateSetupKey("valid key", SetupKeyOneOff, time.Hour, []string{}, SetupKeyUnlimitedUsage, false)
 	if !validKey.IsValid() {
 		t.Errorf("expected key to be valid, got invalid %v", validKey)
 	}
 
 	// expired
-	expiredKey := GenerateSetupKey("invalid key", SetupKeyOneOff, -time.Hour, []string{}, SetupKeyUnlimitedUsage)
+	expiredKey := GenerateSetupKey("invalid key", SetupKeyOneOff, -time.Hour, []string{}, SetupKeyUnlimitedUsage, false)
 	if expiredKey.IsValid() {
 		t.Errorf("expected key to be invalid due to expiration, got valid %v", expiredKey)
 	}
 
 	// revoked
-	revokedKey := GenerateSetupKey("invalid key", SetupKeyOneOff, time.Hour, []string{}, SetupKeyUnlimitedUsage)
+	revokedKey := GenerateSetupKey("invalid key", SetupKeyOneOff, time.Hour, []string{}, SetupKeyUnlimitedUsage, false)
 	revokedKey.Revoked = true
 	if revokedKey.IsValid() {
 		t.Errorf("expected revoked key to be invalid, got valid %v", revokedKey)
 	}
 
 	// overused
-	overUsedKey := GenerateSetupKey("invalid key", SetupKeyOneOff, time.Hour, []string{}, SetupKeyUnlimitedUsage)
+	overUsedKey := GenerateSetupKey("invalid key", SetupKeyOneOff, time.Hour, []string{}, SetupKeyUnlimitedUsage, false)
 	overUsedKey.UsedTimes = 1
 	if overUsedKey.IsValid() {
 		t.Errorf("expected overused key to be invalid, got valid %v", overUsedKey)
 	}
 
 	// overused
-	reusableKey := GenerateSetupKey("valid key", SetupKeyReusable, time.Hour, []string{}, SetupKeyUnlimitedUsage)
+	reusableKey := GenerateSetupKey("valid key", SetupKeyReusable, time.Hour, []string{}, SetupKeyUnlimitedUsage, false)
 	reusableKey.UsedTimes = 99
 	if !reusableKey.IsValid() {
 		t.Errorf("expected reusable key to be valid when used many times, got valid %v", reusableKey)
@@ -282,7 +282,7 @@ func assertKey(t *testing.T, key *SetupKey, expectedName string, expectedRevoke
 
 func TestSetupKey_Copy(t *testing.T) {
 
-	key := GenerateSetupKey("key name", SetupKeyOneOff, time.Hour, []string{}, SetupKeyUnlimitedUsage)
+	key := GenerateSetupKey("key name", SetupKeyOneOff, time.Hour, []string{}, SetupKeyUnlimitedUsage, false)
 	keyCopy := key.Copy()
 
 	assertKey(t, keyCopy, key.Name, key.Revoked, string(key.Type), key.UsedTimes, key.CreatedAt, key.ExpiresAt, key.Id,