diff --git a/deployment/network-operator/templates/mellanox.com_v1alpha1_nicclusterpolicy_cr.yaml b/deployment/network-operator/templates/mellanox.com_v1alpha1_nicclusterpolicy_cr.yaml
index c71d9f75..4da2ac34 100644
--- a/deployment/network-operator/templates/mellanox.com_v1alpha1_nicclusterpolicy_cr.yaml
+++ b/deployment/network-operator/templates/mellanox.com_v1alpha1_nicclusterpolicy_cr.yaml
@@ -18,8 +18,6 @@ apiVersion: mellanox.com/v1alpha1
 kind: NicClusterPolicy
 metadata:
   name: nic-cluster-policy
-  annotations:
-    helm.sh/hook: post-install,post-upgrade
 spec:
   {{- if .Values.nodeAffinity }}
   nodeAffinity:
diff --git a/deployment/network-operator/templates/delete-cr-hook.yaml b/deployment/network-operator/templates/scale-down-hook.yaml
similarity index 66%
rename from deployment/network-operator/templates/delete-cr-hook.yaml
rename to deployment/network-operator/templates/scale-down-hook.yaml
index 3103bf1a..d124e77c 100644
--- a/deployment/network-operator/templates/delete-cr-hook.yaml
+++ b/deployment/network-operator/templates/scale-down-hook.yaml
@@ -1,54 +1,59 @@
-{{- if .Values.deployCR }}
 ---
 apiVersion: v1
 kind: ServiceAccount
 metadata:
-  name: {{ include "network-operator.fullname" . }}-hooks-sa
+  name: {{ include "network-operator.fullname" . }}-hooks-scale-sa
   annotations:
-    helm.sh/hook: post-delete
+    helm.sh/hook: pre-install,pre-upgrade
     helm.sh/hook-delete-policy: hook-succeeded,before-hook-creation
     helm.sh/hook-weight: "0"
 ---
 apiVersion: rbac.authorization.k8s.io/v1
 kind: ClusterRole
 metadata:
-  name: {{ include "network-operator.fullname" . }}-hooks-role
+  name: {{ include "network-operator.fullname" . }}-hooks-scale-role
   annotations:
-    helm.sh/hook: post-delete
+    helm.sh/hook: pre-install,pre-upgrade
     helm.sh/hook-delete-policy: hook-succeeded,before-hook-creation
     helm.sh/hook-weight: "0"
 rules:
   - apiGroups:
-      - mellanox.com
+      - apps
     resources:
-      - nicclusterpolicies
+      - deployments/scale
     verbs:
-      - delete
+      - "*"
+  - apiGroups:
+      - ""
+    resources:
+      - pods
+    verbs:
+      - "*"
 ---
 kind: ClusterRoleBinding
 apiVersion: rbac.authorization.k8s.io/v1
 metadata:
-  name: {{ include "network-operator.fullname" . }}-hooks-binding
+  name: {{ include "network-operator.fullname" . }}-hooks-scale-binding
   annotations:
-    helm.sh/hook: post-delete
+    helm.sh/hook: pre-install,pre-upgrade
     helm.sh/hook-delete-policy: hook-succeeded,before-hook-creation
     helm.sh/hook-weight: "0"
 subjects:
   - kind: ServiceAccount
-    name: {{ include "network-operator.fullname" . }}-hooks-sa
+    name: {{ include "network-operator.fullname" . }}-hooks-scale-sa
     namespace: {{ .Release.Namespace }}
 roleRef:
   kind: ClusterRole
-  name: {{ include "network-operator.fullname" . }}-hooks-role
+  name: {{ include "network-operator.fullname" . }}-hooks-scale-role
   apiGroup: rbac.authorization.k8s.io
 ---
 apiVersion: batch/v1
 kind: Job
 metadata:
-  name: network-operator-delete-cr
+  name: network-operator-scale-down
   namespace: {{ .Release.Namespace }}
   annotations:
-    "helm.sh/hook": post-delete
+    "helm.sh/hook": pre-install,pre-upgrade
     "helm.sh/hook-weight": "1"
     "helm.sh/hook-delete-policy": hook-succeeded,before-hook-creation
   labels:
@@ -57,7 +62,7 @@ metadata:
 spec:
   template:
     metadata:
-      name: network-operator-delete-cr
+      name: network-operator-scale-down
       labels:
         {{- include "network-operator.labels" . | nindent 8 }}
         app.kubernetes.io/component: "network-operator"
@@ -74,16 +79,16 @@ spec:
       tolerations:
       {{- toYaml . | nindent 8 }}
       {{- end }}
-      serviceAccountName: {{ include "network-operator.fullname" . }}-hooks-sa
+      serviceAccountName: {{ include "network-operator.fullname" . }}-hooks-scale-sa
       imagePullSecrets: {{ include "network-operator.operator.imagePullSecrets" . }}
       containers:
-        - name: delete-cr
+        - name: scale-down
           image: "{{ .Values.operator.repository }}/{{ .Values.operator.image }}:{{ .Values.operator.tag | default .Chart.AppVersion }}"
           imagePullPolicy: IfNotPresent
           command:
             - /bin/sh
             - -c
             - >
-              kubectl delete nicclusterpolicies.mellanox.com nic-cluster-policy;
+              kubectl scale -n {{ .Release.Namespace }} deployment {{ include "network-operator.fullname" . }} --replicas=0 || true;
+              kubectl wait -n {{ .Release.Namespace }} pod -l control-plane={{ .Release.Name }}-controller --for=delete --timeout=30s;
       restartPolicy: OnFailure
-{{- end }}
diff --git a/pkg/migrate/migrate.go b/pkg/migrate/migrate.go
index 8a862e49..6419f55b 100644
--- a/pkg/migrate/migrate.go
+++ b/pkg/migrate/migrate.go
@@ -18,11 +18,14 @@ package migrate
 
 import (
 	"context"
+	"fmt"
 
 	"github.com/go-logr/logr"
 	v1 "k8s.io/api/batch/v1"
+	corev1 "k8s.io/api/core/v1"
 	apiErrors "k8s.io/apimachinery/pkg/api/errors"
 	metav1 "k8s.io/apimachinery/pkg/apis/meta/v1"
+	"k8s.io/apimachinery/pkg/types"
 	"sigs.k8s.io/controller-runtime/pkg/client"
 
 	"github.com/Mellanox/network-operator/pkg/config"
@@ -46,6 +49,11 @@ func migrate(ctx context.Context, log logr.Logger, c client.Client) error {
 		// not critical for the operator operation, safer to ignore
 		log.V(consts.LogLevelWarning).Info("ignore error during whereabouts CronJob removal")
 	}
+	if err := removeStateLabelFromNVIpamConfigMap(ctx, log, c); err != nil {
+		// critical for the operator operation, will fail NVIPAM migration
+		log.V(consts.LogLevelError).Error(err, "error trying to remove state label on NV IPAM configmap")
+		return err
+	}
 	return nil
 }
 
@@ -68,3 +76,41 @@ func removeWhereaboutsIPReconcileCronJob(ctx context.Context, log logr.Logger, c
 	}
 	return nil
 }
+
+// reason: remove state label on NV IPAM config map if exists, to allow migration to IPPool CR
+// If the state label is present, the config map will be removed by the NCP Controller as a stale object
+func removeStateLabelFromNVIpamConfigMap(ctx context.Context, log logr.Logger, c client.Client) error {
+	namespace := config.FromEnv().State.NetworkOperatorResourceNamespace
+	cmName := "nvidia-k8s-ipam-config"
+	cfg := &corev1.ConfigMap{}
+	key := types.NamespacedName{
+		Name:      cmName,
+		Namespace: namespace,
+	}
+	err := c.Get(ctx, key, cfg)
+	if apiErrors.IsNotFound(err) {
+		log.V(consts.LogLevelDebug).Info("NVIPAM config map not found, skip remove state label")
+		return nil
+	} else if err != nil {
+		log.V(consts.LogLevelError).Error(err, "fail to get NVIPAM configmap")
+		return err
+	}
+	_, ok := cfg.Labels[consts.StateLabel]
+	if ok {
+		log.V(consts.LogLevelDebug).Info("clear State label from NVIPAM configmap")
+		patch := []byte(fmt.Sprintf("[{\"op\": \"remove\", \"path\": \"/metadata/labels/%s\"}]", consts.StateLabel))
+		err = c.Patch(ctx, &corev1.ConfigMap{
+			ObjectMeta: metav1.ObjectMeta{
+				Name:      cmName,
+				Namespace: namespace,
+			},
+		}, client.RawPatch(types.JSONPatchType, patch))
+		if err != nil {
+			log.V(consts.LogLevelError).Error(err, "fail to remove State label from NVIPAM configmap")
+			return err
+		}
+	} else {
+		log.V(consts.LogLevelDebug).Info("state label not set on NVIPAM configmap")
+	}
+	return nil
+}