diff --git a/server/src/main/java/com/cloud/vm/UserVmManagerImpl.java b/server/src/main/java/com/cloud/vm/UserVmManagerImpl.java
index 96c87c5376d8..a368436508e9 100644
--- a/server/src/main/java/com/cloud/vm/UserVmManagerImpl.java
+++ b/server/src/main/java/com/cloud/vm/UserVmManagerImpl.java
@@ -5302,6 +5302,11 @@ private UserVm startVirtualMachine(long vmId, Long podId, Long clusterId, Long h
             updateVmStateForFailedVmCreation(vm.getId(), hostId);
         }
 
+        Object backupId = CallContext.current().getContextParameter(ApiConstants.BACKUP_ID);
+        if (backupId != null) {
+            logger.debug("VM is restored from backup, skipping password setting");
+            return vm;
+        }
         // Check that the password was passed in and is valid
         VMTemplateVO template = _templateDao.findByIdIncludingRemoved(vm.getTemplateId());
         if (template.isEnablePassword()) {
@@ -9763,6 +9768,7 @@ public UserVm restoreVMFromBackup(CreateVMFromBackupCmd cmd) throws ResourceUnav
         }
 
         if (cmd.getStartVm()) {
+            CallContext.current().putContextParameter(ApiConstants.BACKUP_ID, cmd.getBackupId());
             Long podId = null;
             Long clusterId = null;
             if (cmd instanceof CreateVMFromBackupCmdByAdmin) {
diff --git a/server/src/test/java/com/cloud/vm/UserVmManagerImplTest.java b/server/src/test/java/com/cloud/vm/UserVmManagerImplTest.java
index a21477aeb80e..7a5ad73669dd 100644
--- a/server/src/test/java/com/cloud/vm/UserVmManagerImplTest.java
+++ b/server/src/test/java/com/cloud/vm/UserVmManagerImplTest.java
@@ -3593,7 +3593,6 @@ public void testAllocateVMFromBackupUsingBackupValuesWithISO() throws Insufficie
     @Test
     public void testRestoreVMFromBackup() throws ResourceUnavailableException, InsufficientCapacityException, ResourceAllocationException {
         Long backupId = 5L;
-        Long templateId = 6L;
 
         CreateVMFromBackupCmd cmd = mock(CreateVMFromBackupCmd.class);
         when(cmd.getBackupId()).thenReturn(backupId);
@@ -3603,7 +3602,6 @@ public void testRestoreVMFromBackup() throws ResourceUnavailableException, Insuf
         UserVmVO vm = mock(UserVmVO.class);
         when(vm.getId()).thenReturn(vmId);
         when(vm.getState()).thenReturn(VirtualMachine.State.Running);
-        when(vm.getTemplateId()).thenReturn(templateId);
 
         when(backupManager.restoreBackupToVM(backupId, vmId)).thenReturn(true);
 
@@ -3612,7 +3610,6 @@ public void testRestoreVMFromBackup() throws ResourceUnavailableException, Insuf
         doReturn(vmPair).when(userVmManagerImpl).startVirtualMachine(anyLong(), isNull(), isNull(), isNull(), anyMap(), isNull());
         doReturn(vmPair).when(userVmManagerImpl).startVirtualMachine(anyLong(), isNull(), isNull(), anyLong(), anyMap(), isNull());
         when(userVmDao.findById(vmId)).thenReturn(vm);
-        when(templateDao.findByIdIncludingRemoved(templateId)).thenReturn(mock(VMTemplateVO.class));
 
         UserVm result = userVmManagerImpl.restoreVMFromBackup(cmd);