diff --git a/modules/compute-vm/main.tf b/modules/compute-vm/main.tf
index 56adefae3e..ecde36180f 100644
--- a/modules/compute-vm/main.tf
+++ b/modules/compute-vm/main.tf
@@ -376,6 +376,10 @@ resource "google_compute_instance_template" "default" {
     disk_type             = var.boot_disk.initialize_params.type
     resource_manager_tags = var.tag_bindings
     source_image          = var.boot_disk.initialize_params.image
+
+    disk_encryption_key {
+      kms_key_self_link = var.encryption.kms_key_self_link
+    }
   }
 
   dynamic "confidential_instance_config" {