diff --git a/Gopkg.lock b/Gopkg.lock
index 3e92ffda281e..294c5582d913 100644
--- a/Gopkg.lock
+++ b/Gopkg.lock
@@ -958,7 +958,6 @@
   revision = "e3762e86a74c878ffed47484592986685639c2cd"
 
 [[projects]]
-  branch = "master"
   digest = "1:797d85ec2636b83dafa570b602919912108b913b34e213c9205214361bab722a"
   name = "sigs.k8s.io/cluster-api"
   packages = [
@@ -1002,6 +1001,7 @@
   input-imports = [
     "github.com/ghodss/yaml",
     "github.com/golang/glog",
+    "github.com/google/uuid",
     "github.com/kubernetes-incubator/apiserver-builder/pkg/controller",
     "github.com/spf13/pflag",
     "github.com/vmware/govmomi",
diff --git a/pkg/cloud/vsphere/provisioner/govmomi/create.go b/pkg/cloud/vsphere/provisioner/govmomi/create.go
index 15967aada4aa..0e47c2ff8402 100644
--- a/pkg/cloud/vsphere/provisioner/govmomi/create.go
+++ b/pkg/cloud/vsphere/provisioner/govmomi/create.go
@@ -160,10 +160,30 @@ func (pv *Provisioner) cloneVirtualMachine(s *SessionContext, cluster *clusterv1
 	}
 	spec.Config.Annotation = fmt.Sprintf("Virtual Machine is part of the cluster %s managed by cluster-api", cluster.Name)
 	spec.Location.DiskMoveType = string(types.VirtualMachineRelocateDiskMoveOptionsMoveAllDiskBackingsAndAllowSharing)
-	src, err := s.finder.VirtualMachine(ctx, machineConfig.MachineSpec.VMTemplate)
-	if err != nil {
-		return err
+	var src *object.VirtualMachine
+	if vsphereutils.IsValidUUID(machineConfig.MachineSpec.VMTemplate) {
+		// If the passed VMTemplate is a valid UUID, then first try to find it treating that as InstanceUUID
+		// In case if are not able to locate a matching VM then fall back to searching using the VMTemplate
+		// as a name
+		glog.V(4).Infof("Trying to resolve the VMTemplate as InstanceUUID %s", machineConfig.MachineSpec.VMTemplate)
+		si := object.NewSearchIndex(s.session.Client)
+		instanceUUID := true
+		templateref, err := si.FindByUuid(ctx, dc, machineConfig.MachineSpec.VMTemplate, true, &instanceUUID)
+		if err != nil {
+			return fmt.Errorf("error quering virtual machine or template using FindByUuid: %s", err)
+		}
+		if templateref != nil {
+			src = object.NewVirtualMachine(s.session.Client, templateref.Reference())
+		}
 	}
+	if src == nil {
+		glog.V(4).Infof("Trying to resolve the VMTemplate as Name %s", machineConfig.MachineSpec.VMTemplate)
+		src, err = s.finder.VirtualMachine(ctx, machineConfig.MachineSpec.VMTemplate)
+		if err != nil {
+			return err
+		}
+	}
+
 	vmProps, err := Properties(src)
 	if err != nil {
 		return fmt.Errorf("error fetching virtual machine or template properties: %s", err)
diff --git a/pkg/cloud/vsphere/utils/utils.go b/pkg/cloud/vsphere/utils/utils.go
index 2561bb9f0237..97b44252e2ce 100644
--- a/pkg/cloud/vsphere/utils/utils.go
+++ b/pkg/cloud/vsphere/utils/utils.go
@@ -12,6 +12,7 @@ import (
 	"strings"
 
 	"github.com/golang/glog"
+	"github.com/google/uuid"
 	"k8s.io/apimachinery/pkg/labels"
 	vsphereconfig "sigs.k8s.io/cluster-api-provider-vsphere/pkg/apis/vsphereproviderconfig"
 	vsphereconfigv1 "sigs.k8s.io/cluster-api-provider-vsphere/pkg/apis/vsphereproviderconfig/v1alpha1"
@@ -197,3 +198,8 @@ func ByteToGiB(n int64) int64 {
 func GiBToByte(n int64) int64 {
 	return int64(n * int64(math.Pow(1024, 3)))
 }
+
+func IsValidUUID(str string) bool {
+	_, err := uuid.Parse(str)
+	return err == nil
+}