diff --git a/engine/schema/src/main/java/com/cloud/dc/dao/ClusterDao.java b/engine/schema/src/main/java/com/cloud/dc/dao/ClusterDao.java
index 1745f5380e21..6cfd2608f5de 100644
--- a/engine/schema/src/main/java/com/cloud/dc/dao/ClusterDao.java
+++ b/engine/schema/src/main/java/com/cloud/dc/dao/ClusterDao.java
@@ -34,7 +34,7 @@ public interface ClusterDao extends GenericDao<ClusterVO, Long> {
 
     List<HypervisorType> getAvailableHypervisorInZone(Long zoneId);
 
-    List<Pair<HypervisorType, CPU.CPUArch>> listDistinctHypervisorsArchAcrossClusters(Long zoneId);
+    List<Pair<HypervisorType, CPU.CPUArch>> listDistinctHypervisorsAndArchExcludingExternalType(Long zoneId);
 
     List<ClusterVO> listByDcHyType(long dcId, String hyType);
 
diff --git a/engine/schema/src/main/java/com/cloud/dc/dao/ClusterDaoImpl.java b/engine/schema/src/main/java/com/cloud/dc/dao/ClusterDaoImpl.java
index ea82a10f9c95..c63af0a237ba 100644
--- a/engine/schema/src/main/java/com/cloud/dc/dao/ClusterDaoImpl.java
+++ b/engine/schema/src/main/java/com/cloud/dc/dao/ClusterDaoImpl.java
@@ -168,16 +168,26 @@ public List<HypervisorType> getAvailableHypervisorInZone(Long zoneId) {
                 .collect(Collectors.toList());
     }
 
+    /**
+     * Returns distinct (HypervisorType, CPUArch) pairs from clusters in the given zone,
+     * excluding clusters with {@link HypervisorType#External}.
+     *
+     * @param zoneId the zone ID to filter by, or {@code null} to include all zones
+     * @return list of unique hypervisor type and CPU architecture pairs
+     */
     @Override
-    public List<Pair<HypervisorType, CPU.CPUArch>> listDistinctHypervisorsArchAcrossClusters(Long zoneId) {
+    public List<Pair<HypervisorType, CPU.CPUArch>> listDistinctHypervisorsAndArchExcludingExternalType(Long zoneId) {
         SearchBuilder<ClusterVO> sb = createSearchBuilder();
         sb.select(null, Func.DISTINCT_PAIR, sb.entity().getHypervisorType(), sb.entity().getArch());
         sb.and("zoneId", sb.entity().getDataCenterId(), SearchCriteria.Op.EQ);
+        sb.and("hypervisorType", sb.entity().getHypervisorType(), SearchCriteria.Op.NEQ);
         sb.done();
         SearchCriteria<ClusterVO> sc = sb.create();
         if (zoneId != null) {
             sc.setParameters("zoneId", zoneId);
         }
+        sc.setParameters("hypervisorType", HypervisorType.External);
+
         final List<ClusterVO> clusters = search(sc, null);
         return clusters.stream()
                 .map(c -> new Pair<>(c.getHypervisorType(), c.getArch()))
diff --git a/engine/schema/src/main/java/com/cloud/upgrade/SystemVmTemplateRegistration.java b/engine/schema/src/main/java/com/cloud/upgrade/SystemVmTemplateRegistration.java
index 26b033c8d790..9b1420f22c37 100644
--- a/engine/schema/src/main/java/com/cloud/upgrade/SystemVmTemplateRegistration.java
+++ b/engine/schema/src/main/java/com/cloud/upgrade/SystemVmTemplateRegistration.java
@@ -917,7 +917,7 @@ protected void registerTemplatesForZone(long zoneId, String filePath) {
         String nfsVersion = getNfsVersion(storeUrlAndId.second());
         mountStore(storeUrlAndId.first(), filePath, nfsVersion);
         List<Pair<Hypervisor.HypervisorType, CPU.CPUArch>> hypervisorArchList =
-                clusterDao.listDistinctHypervisorsArchAcrossClusters(zoneId);
+                clusterDao.listDistinctHypervisorsAndArchExcludingExternalType(zoneId);
         for (Pair<Hypervisor.HypervisorType, CPU.CPUArch> hypervisorArch : hypervisorArchList) {
             Hypervisor.HypervisorType hypervisorType = hypervisorArch.first();
             MetadataTemplateDetails templateDetails = getMetadataTemplateDetails(hypervisorType,
@@ -1065,7 +1065,7 @@ public void updateSystemVmTemplates(final Connection conn) {
             public void doInTransactionWithoutResult(final TransactionStatus status) {
                 List<Pair<Hypervisor.HypervisorType, CPU.CPUArch>> hypervisorsInUse;
                 try {
-                    hypervisorsInUse = clusterDao.listDistinctHypervisorsArchAcrossClusters(null);
+                    hypervisorsInUse = clusterDao.listDistinctHypervisorsAndArchExcludingExternalType(null);
                 } catch (final Exception e) {
                     throw new CloudRuntimeException("Exception while getting hypervisor types from clusters", e);
                 }
diff --git a/engine/schema/src/test/java/com/cloud/dc/dao/ClusterDaoImplTest.java b/engine/schema/src/test/java/com/cloud/dc/dao/ClusterDaoImplTest.java
index f8673fa9c9fd..c1a558a72b33 100644
--- a/engine/schema/src/test/java/com/cloud/dc/dao/ClusterDaoImplTest.java
+++ b/engine/schema/src/test/java/com/cloud/dc/dao/ClusterDaoImplTest.java
@@ -92,7 +92,7 @@ public void listDistinctHypervisorsArchAcrossClusters_WithZone() {
         when(cluster2.getArch()).thenReturn(CPU.CPUArch.arm64);
         List<ClusterVO> dummyHosts = Arrays.asList(cluster1, cluster2);
         doReturn(dummyHosts).when(clusterDao).search(any(SearchCriteria.class), isNull());
-        List<Pair<Hypervisor.HypervisorType, CPU.CPUArch>> result = clusterDao.listDistinctHypervisorsArchAcrossClusters(zoneId);
+        List<Pair<Hypervisor.HypervisorType, CPU.CPUArch>> result = clusterDao.listDistinctHypervisorsAndArchExcludingExternalType(zoneId);
         assertNotNull(result);
         assertEquals(2, result.size());
         assertEquals(Hypervisor.HypervisorType.XenServer, result.get(0).first());
@@ -109,7 +109,7 @@ public void listDistinctHypervisorsArchAcrossClusters_WithoutZone() {
         when(cluster.getArch()).thenReturn(CPU.CPUArch.amd64);
         List<ClusterVO> dummyHosts = Collections.singletonList(cluster);
         doReturn(dummyHosts).when(clusterDao).search(any(SearchCriteria.class), isNull());
-        List<Pair<Hypervisor.HypervisorType, CPU.CPUArch>> result = clusterDao.listDistinctHypervisorsArchAcrossClusters(zoneId);
+        List<Pair<Hypervisor.HypervisorType, CPU.CPUArch>> result = clusterDao.listDistinctHypervisorsAndArchExcludingExternalType(zoneId);
         assertNotNull(result);
         assertEquals(1, result.size());
         assertEquals(Hypervisor.HypervisorType.VMware, result.get(0).first());
diff --git a/engine/schema/src/test/java/com/cloud/upgrade/SystemVmTemplateRegistrationTest.java b/engine/schema/src/test/java/com/cloud/upgrade/SystemVmTemplateRegistrationTest.java
index 6573a5565f30..dceb8e07b07d 100644
--- a/engine/schema/src/test/java/com/cloud/upgrade/SystemVmTemplateRegistrationTest.java
+++ b/engine/schema/src/test/java/com/cloud/upgrade/SystemVmTemplateRegistrationTest.java
@@ -404,7 +404,7 @@ public void testRegisterTemplatesForZone() {
             Hypervisor.HypervisorType hypervisorType = Hypervisor.HypervisorType.KVM;
             CPU.CPUArch arch = CPU.CPUArch.getDefault();
             hypervisorArchList.add(new Pair<>(hypervisorType, arch));
-            doReturn(hypervisorArchList).when(clusterDao).listDistinctHypervisorsArchAcrossClusters(zoneId);
+            doReturn(hypervisorArchList).when(clusterDao).listDistinctHypervisorsAndArchExcludingExternalType(zoneId);
             SystemVmTemplateRegistration.MetadataTemplateDetails details =
                     Mockito.mock(SystemVmTemplateRegistration.MetadataTemplateDetails.class);
             String name = "existing";
diff --git a/server/src/main/java/com/cloud/storage/StorageManagerImpl.java b/server/src/main/java/com/cloud/storage/StorageManagerImpl.java
index f6bef8b2e8cf..cd13252d651e 100644
--- a/server/src/main/java/com/cloud/storage/StorageManagerImpl.java
+++ b/server/src/main/java/com/cloud/storage/StorageManagerImpl.java
@@ -4029,7 +4029,7 @@ public void doInTransactionWithoutResult(final TransactionStatus status) {
                             DataStoreRole.Image, store.getId());
                     if (CollectionUtils.isEmpty(stores)) {
                         List<Pair<HypervisorType, CPU.CPUArch>> hypervisorTypes =
-                                _clusterDao.listDistinctHypervisorsArchAcrossClusters(zoneId);
+                                _clusterDao.listDistinctHypervisorsAndArchExcludingExternalType(zoneId);
                         TransactionLegacy txn = TransactionLegacy.open("AutomaticTemplateRegister");
                         SystemVmTemplateRegistration systemVmTemplateRegistration = new SystemVmTemplateRegistration();
                         String filePath = null;