diff --git a/data/microos/ignition/config.ign b/data/microos/ignition/config.ign
new file mode 100644
index 000000000000..a926fba4e95c
--- /dev/null
+++ b/data/microos/ignition/config.ign
@@ -0,0 +1,11 @@
+{
+        "ignition": { "version": "3.0.0" },
+        "passwd": {
+                "users": [
+                        {
+                                "name": "root",
+                                "passwordHash": "$6$eEm2HpuzI7dfE4i7$dbYiTRLhrqVvwryR7zmMEcnrp13IqZ3mzLbsx9EeHAX7849PibGVgX5vdPuaeYYIO7hVfcboI9/JDpGiDZhHf/"
+                        }
+                ]
+        }
+}
diff --git a/lib/main_ltp.pm b/lib/main_ltp.pm
index ea5a7133c637..a7e69ef84a9a 100644
--- a/lib/main_ltp.pm
+++ b/lib/main_ltp.pm
@@ -34,7 +34,17 @@ sub load_kernel_tests {
 
     if (get_var('INSTALL_LTP')) {
         if (is_transactional) {
-            is_s390x ? loadtest 'boot/boot_to_desktop' : loadtest 'microos/disk_boot';
+            # Handle specific boot requirements for different backends and architectures
+            if (is_s390x) {
+                loadtest 'boot/boot_to_desktop';
+            }
+            elsif ((is_ipmi || is_pvm)) {
+                loadtest 'installation/ipxe_install' if is_ipmi;
+                loadtest 'microos/install_image';
+            }
+            else {
+                loadtest 'microos/disk_boot';
+            }
             replace_opensuse_repos_tests if is_repo_replacement_required;
             loadtest 'transactional/host_config';
             loadtest 'console/suseconnect_scc' if is_sle_micro;
diff --git a/tests/microos/install_image.pm b/tests/microos/install_image.pm
new file mode 100644
index 000000000000..c8df8078aeb8
--- /dev/null
+++ b/tests/microos/install_image.pm
@@ -0,0 +1,99 @@
+# SUSE's openQA tests
+#
+# Copyright SUSE LLC
+# SPDX-License-Identifier: FSFAP
+
+# Summary: Install SL Micro image on bare metal disk
+# Maintainer: Petr Cervinka <pcervinka@suse.com>
+
+use base 'opensusebasetest';
+use strict;
+use warnings;
+use testapi;
+use utils;
+
+use Utils::Backends;
+use Utils::Architectures 'is_x86_64';
+use power_action_utils 'power_action';
+use serial_terminal 'select_serial_terminal';
+
+sub run {
+    select_serial_terminal;
+
+    # Use image name from HDD_1 variable
+    my $image = get_required_var('HDD_1');
+    # Use sda as target disk by default
+    my $device = get_var("MICRO_INSTALL_IMAGE_TARGET_DEVICE", "/dev/sda");
+    # Use partition prefix for nvme devices
+    my $prefix = $device =~ /nvme/ ? "n" : "";
+    # SL Micro x86_64 image has three partitions, aarch64 and ppc64le images have only two partitions
+    my $root_partition_id = is_x86_64 ? 3 : 2;
+    my $root_partition = "${device}" . $prefix . $root_partition_id;
+    # New partition id for ignition will be directly after root partition
+    my $ignition_partition_id = $root_partition_id + 1;
+    my $ignition_partition = "${device}" . $prefix . $ignition_partition_id;
+    record_info("Device information", "Device: ${device}\nRoot partition: ${root_partition}\nIgnition partition: ${ignition_partition}");
+
+    # Mount nfs share with images
+    assert_script_run("mount -o ro,noauto,nofail,nolock -t nfs openqa.suse.de:/var/lib/openqa/share /mnt");
+    assert_script_run("ls -als /mnt/factory/hdd/${image}");
+    # dd image to disk
+    assert_script_run("xzcat /mnt/factory/hdd/${image} | dd of=${device} bs=65536 status=progress", timeout => 300);
+    assert_script_run("sync");
+    assert_script_run("umount /mnt");
+
+    my $device_layout = script_output("lsblk");
+    record_info("Device layout", ${device_layout});
+
+    # Modify disk to be able to correctly boot and login
+    assert_script_run("mount ${root_partition} /mnt");
+    assert_script_run("btrfs property set /mnt ro false");
+    # Set correct serial console to be able to see login in first boot
+    assert_script_run("sed -i 's/console=ttyS0,115200/console=ttyS1,115200/g' /mnt/boot/grub2/grub.cfg") if is_x86_64;
+    # Upload original grub configuration
+    upload_logs("/mnt/etc/default/grub", failok => 1);
+    # Set permanent grub configuration
+    assert_script_run("sed -i 's/console=ttyS0,115200/console=ttyS1,115200/g' /mnt/etc/default/grub") if is_x86_64;
+    # Fully disable graphical terminal on legacy systems without UEFI
+    assert_script_run("sed -i 's/#GRUB_TERMINAL=console/GRUB_TERMINAL=console/g' /mnt/etc/default/grub") if (is_ipmi && !get_var('IPXE_UEFI'));
+    # We need to properly set grub terminal bsc#1230844, otherwise grub menu will not be visible in non graphical boot environments
+    assert_script_run("sed -i 's/GRUB_TERMINAL_INPUT=\".*\"/GRUB_TERMINAL_INPUT=\"console gfxterm\"/g' /mnt/etc/default/grub");
+    assert_script_run("sed -i 's/GRUB_TERMINAL_OUTPUT=\".*\"/GRUB_TERMINAL_OUTPUT=\"console gfxterm\"/g' /mnt/etc/default/grub");
+    # Enable root loging with password
+    assert_script_run("echo 'PermitRootLogin yes' > /mnt/etc/ssh/sshd_config.d/root.conf");
+    assert_script_run("btrfs property set /mnt ro true");
+    assert_script_run("umount /mnt");
+
+    # Setup ignition parition on the end of the same disk and resize root partition to use all the space
+    # script_output recommended in https://github.com/os-autoinst/os-autoinst-distri-opensuse/pull/20253/files#r1776549682
+    script_output("printf \"fix\n\" | parted ---pretend-input-tty ${device} print");
+    assert_script_run("parted ${device} --script mkpart primary ext4 98% 100%");
+    assert_script_run("mkfs.ext4 -F ${ignition_partition}");
+    assert_script_run("e2label ${ignition_partition} ignition");
+    assert_script_run("mount ${ignition_partition} /mnt/");
+    assert_script_run("mkdir /mnt/ignition");
+    assert_script_run("curl -v -o /mnt/ignition/config.ign " . data_url("microos/ignition/config.ign"));
+    assert_script_run('umount /mnt');
+
+    # Resize root filesystem to maximum size to use all space up to partition with ignition
+    assert_script_run("parted ${device} --script resize ${root_partition_id} 98%");
+    assert_script_run("mount ${root_partition} /mnt");
+    assert_script_run("btrfs filesystem resize max /mnt");
+    assert_script_run("umount /mnt");
+    assert_script_run("fdisk ${device} -l");
+    record_info("INFO", "${image} was installed on ${device}. System is going to be rebooted");
+
+    # We have to use force option to reboot command as installer doesn't have fully running systemd environment
+    power_action("reboot", textmode => 1, force => 1);
+
+    # We can't use reconnect_mgmt_console as it expects fully configured grub, which we don't have at this stage yet
+    select_console "sol", await_console => 0 if is_ipmi;
+    select_console 'powerhmc-ssh', await_console => 0 if is_pvm_hmc;
+    assert_screen("linux-login", 1800);
+}
+
+sub test_flags {
+    return {fatal => 1};
+}
+
+1;
diff --git a/variables.md b/variables.md
index b943961936b2..21fcb47a67f9 100644
--- a/variables.md
+++ b/variables.md
@@ -141,6 +141,7 @@ LVM_THIN_LV | boolean | false | Use thin provisioning logical volumes for partit
 MACHINE | string | | Define machine name which defines worker specific configuration, including WORKER_CLASS.
 MEDIACHECK | boolean | false | Enables `installation/mediacheck` test module.
 MEMTEST | boolean | false | Enables `installation/memtest` test module.
+MICRO_INSTALL_IMAGE_TARGET_DEVICE | string | /dev/sda | Target disk device for bare metal SL Micro installation.
 MIRROR_{protocol} | string | | Specify source address
 MM_MTU | integer | 1380 | Specifies the MTU to set in SUTs of MM tests usually started with `NICTYPE=tap`.
 MOK_VERBOSITY | boolean | false | Enable verbosity feature of shim. Requires preinstalled `mokutil`.