diff --git a/src/plugins/intel_cpu/tests/functional/custom/subgraph_tests/src/arm/convert_reduce_no_keep_dims.cpp b/src/plugins/intel_cpu/tests/functional/custom/subgraph_tests/src/arm/convert_reduce_no_keep_dims.cpp
new file mode 100644
index 00000000000000..bb23a17c728d3f
--- /dev/null
+++ b/src/plugins/intel_cpu/tests/functional/custom/subgraph_tests/src/arm/convert_reduce_no_keep_dims.cpp
@@ -0,0 +1,111 @@
+// Copyright (C) 2023 Intel Corporation
+// SPDX-License-Identifier: Apache-2.0
+//
+
+#include "common_test_utils/common_utils.hpp"
+#include "common_test_utils/node_builders/reduce.hpp"
+#include "common_test_utils/ov_tensor_utils.hpp"
+#include "shared_test_classes/base/ov_subgraph.hpp"
+#include "utils/cpu_test_utils.hpp"
+#include "utils/general_utils.h"
+
+using namespace CPUTestUtils;
+using namespace ov::intel_cpu;
+
+namespace ov {
+namespace test {
+
+typedef std::tuple<int,                             // Axe to reduce order
+                   ov::test::utils::ReductionType,  // Reduce operation type
+                   std::vector<InputShape>          // Input shapes
+                   >
+    ReduceConvertCPUTestParamsSet;
+
+class ReduceNoKeepDimsTransformationCPUTest: public testing::WithParamInterface<ReduceConvertCPUTestParamsSet>,
+                                             virtual public SubgraphBaseTest, public CPUTestsBase {
+public:
+    static std::string getTestCaseName(testing::TestParamInfo<ReduceConvertCPUTestParamsSet> obj) {
+        std::vector<InputShape> inputShapes;
+        int axe;
+        utils::ReductionType reductionType;
+        std::tie(axe, reductionType, inputShapes) = obj.param;
+
+        std::ostringstream result;
+        result << "type=" << reductionType << "_";
+        result << "IS=(";
+        for (const auto& shape : inputShapes) {
+            result << ov::test::utils::partialShape2str({shape.first}) << "_";
+        }
+        result << ")_axe=" << axe << "_";
+        return result.str();
+    }
+
+protected:
+    void SetUp() override {
+        targetDevice = ov::test::utils::DEVICE_CPU;
+        int axe;
+        bool keepDims = false;
+        std::vector<InputShape> inputShapes;
+        std::tie(axe, reductionType, inputShapes) = this->GetParam();
+        ov::element::Type_t dataType = one_of(reductionType, utils::ReductionType::LogicalAnd, utils::ReductionType::LogicalOr) ?
+                                            ov::element::boolean : ov::element::f32;
+
+        init_input_shapes(inputShapes);
+        ov::ParameterVector params;
+        for (auto&& shape : inputDynamicShapes) {
+            params.push_back(std::make_shared<ov::op::v0::Parameter>(dataType, shape));
+        }
+        auto reductionAxesNode = std::dynamic_pointer_cast<ov::Node>(
+            std::make_shared<ov::op::v0::Constant>(ov::element::Type_t::i64, ov::Shape{}, axe));
+
+        const auto reduce = utils::make_reduce(params[0], reductionAxesNode, keepDims, reductionType);
+        function = makeNgraphFunction(dataType, params, reduce, "Reduce");
+    }
+private:
+    utils::ReductionType reductionType;
+};
+
+TEST_P(ReduceNoKeepDimsTransformationCPUTest, CompareWithRefs) {
+    run();
+    CheckNumberOfNodesWithType(compiledModel, "Reshape", 1); //Squeeze turns into Reshape
+    CheckNumberOfNodesWithType(compiledModel, "Reduce", 1);
+
+    std::shared_ptr<const ov::Model> function = compiledModel.get_runtime_model();
+    for (const auto& node : function->get_ops()) {
+        if (ov::is_type<ov::op::util::LogicalReductionKeepDims>(node)) {
+            auto reduce_node = std::dynamic_pointer_cast<ov::op::util::LogicalReductionKeepDims>(node);
+            EXPECT_TRUE(reduce_node->get_keep_dims());
+            break;
+        } else if (ov::is_type<ov::op::util::ArithmeticReductionKeepDims>(node)) {
+            auto reduce_node = std::dynamic_pointer_cast<ov::op::util::ArithmeticReductionKeepDims>(node);
+            EXPECT_TRUE(reduce_node->get_keep_dims());
+            break;
+        }
+    }
+}
+
+namespace {
+std::vector<std::vector<ov::test::InputShape>> inputShapes = {
+    {{{}, {{2, 19, 2, 9}}}}
+};
+const std::vector<utils::ReductionType> reductionTypes = {
+        utils::ReductionType::Min,
+        utils::ReductionType::Max,
+        utils::ReductionType::Sum,
+        utils::ReductionType::Prod,
+        utils::ReductionType::LogicalAnd,
+        utils::ReductionType::LogicalOr
+};
+
+const std::vector<int> axes = {0, 1, 2, 3};
+
+const auto reduceTransformationParams = ::testing::Combine(::testing::ValuesIn(axes),
+                                                                     ::testing::ValuesIn(reductionTypes),
+                                                                     ::testing::ValuesIn(inputShapes));
+
+INSTANTIATE_TEST_SUITE_P(smoke_ReduceNoKeepDimsTransformationTest, ReduceNoKeepDimsTransformationCPUTest,
+                         reduceTransformationParams, ReduceNoKeepDimsTransformationCPUTest::getTestCaseName);
+
+}  // namespace
+}  // namespace test
+}  // namespace ov