diff --git a/modules/karpenter/README.md b/modules/karpenter/README.md
index 69c03af907..46fb56e4ff 100644
--- a/modules/karpenter/README.md
+++ b/modules/karpenter/README.md
@@ -120,8 +120,13 @@ No modules.
 | [aws_sqs_queue.this](https://registry.terraform.io/providers/hashicorp/aws/latest/docs/resources/sqs_queue) | resource |
 | [aws_sqs_queue_policy.this](https://registry.terraform.io/providers/hashicorp/aws/latest/docs/resources/sqs_queue_policy) | resource |
 | [aws_caller_identity.current](https://registry.terraform.io/providers/hashicorp/aws/latest/docs/data-sources/caller_identity) | data source |
-| [aws_iam_policy_document.controller](https://registry.terraform.io/providers/hashicorp/aws/latest/docs/data-sources/iam_policy_document) | data source |
+| [aws_iam_policy_document.controller_additional](https://registry.terraform.io/providers/hashicorp/aws/latest/docs/data-sources/iam_policy_document) | data source |
 | [aws_iam_policy_document.controller_assume_role](https://registry.terraform.io/providers/hashicorp/aws/latest/docs/data-sources/iam_policy_document) | data source |
+| [aws_iam_policy_document.controller_eks_integration](https://registry.terraform.io/providers/hashicorp/aws/latest/docs/data-sources/iam_policy_document) | data source |
+| [aws_iam_policy_document.controller_iam_integration](https://registry.terraform.io/providers/hashicorp/aws/latest/docs/data-sources/iam_policy_document) | data source |
+| [aws_iam_policy_document.controller_interruption](https://registry.terraform.io/providers/hashicorp/aws/latest/docs/data-sources/iam_policy_document) | data source |
+| [aws_iam_policy_document.controller_node_lifecycle](https://registry.terraform.io/providers/hashicorp/aws/latest/docs/data-sources/iam_policy_document) | data source |
+| [aws_iam_policy_document.controller_resource_discovery](https://registry.terraform.io/providers/hashicorp/aws/latest/docs/data-sources/iam_policy_document) | data source |
 | [aws_iam_policy_document.node_assume_role](https://registry.terraform.io/providers/hashicorp/aws/latest/docs/data-sources/iam_policy_document) | data source |
 | [aws_iam_policy_document.queue](https://registry.terraform.io/providers/hashicorp/aws/latest/docs/data-sources/iam_policy_document) | data source |
 | [aws_partition.current](https://registry.terraform.io/providers/hashicorp/aws/latest/docs/data-sources/partition) | data source |
diff --git a/modules/karpenter/main.tf b/modules/karpenter/main.tf
index af0e947e76..cffad5fffb 100644
--- a/modules/karpenter/main.tf
+++ b/modules/karpenter/main.tf
@@ -31,6 +31,24 @@ locals {
 
 locals {
   create_iam_role = var.create && var.create_iam_role
+
+  # Split controller policies to avoid exceeding the 6,144 character IAM policy size limit
+  # See: https://github.com/terraform-aws-modules/terraform-aws-eks/issues/3512
+  # See: https://github.com/aws/karpenter-provider-aws/pull/8690
+  controller_policies = local.create_iam_role ? merge(
+    {
+      NodeLifecycle     = data.aws_iam_policy_document.controller_node_lifecycle[0].json
+      IAMIntegration    = data.aws_iam_policy_document.controller_iam_integration[0].json
+      EKSIntegration    = data.aws_iam_policy_document.controller_eks_integration[0].json
+      ResourceDiscovery = data.aws_iam_policy_document.controller_resource_discovery[0].json
+    },
+    local.enable_spot_termination ? {
+      Interruption = data.aws_iam_policy_document.controller_interruption[0].json
+    } : {},
+    var.iam_policy_statements != null ? {
+      Additional = data.aws_iam_policy_document.controller_additional[0].json
+    } : {}
+  ) : {}
 }
 
 data "aws_iam_policy_document" "controller_assume_role" {
@@ -71,31 +89,31 @@ resource "aws_iam_role" "controller" {
 }
 
 resource "aws_iam_role_policy" "controller" {
-  count = local.create_iam_role && var.enable_inline_policy ? 1 : 0
+  for_each = var.enable_inline_policy ? local.controller_policies : {}
 
-  name        = var.iam_policy_use_name_prefix ? null : var.iam_policy_name
-  name_prefix = var.iam_policy_use_name_prefix ? "${var.iam_policy_name}-" : null
+  name        = var.iam_policy_use_name_prefix ? null : "${var.iam_policy_name}${each.key}"
+  name_prefix = var.iam_policy_use_name_prefix ? "${var.iam_policy_name}${each.key}-" : null
   role        = aws_iam_role.controller[0].name
-  policy      = data.aws_iam_policy_document.controller[0].json
+  policy      = each.value
 }
 
 resource "aws_iam_policy" "controller" {
-  count = local.create_iam_role && !var.enable_inline_policy ? 1 : 0
+  for_each = !var.enable_inline_policy ? local.controller_policies : {}
 
-  name        = var.iam_policy_use_name_prefix ? null : var.iam_policy_name
-  name_prefix = var.iam_policy_use_name_prefix ? "${var.iam_policy_name}-" : null
+  name        = var.iam_policy_use_name_prefix ? null : "${var.iam_policy_name}${each.key}"
+  name_prefix = var.iam_policy_use_name_prefix ? "${var.iam_policy_name}${each.key}-" : null
   path        = var.iam_policy_path
-  description = var.iam_policy_description
-  policy      = data.aws_iam_policy_document.controller[0].json
+  description = "${var.iam_policy_description} - ${each.key}"
+  policy      = each.value
 
   tags = var.tags
 }
 
 resource "aws_iam_role_policy_attachment" "controller" {
-  count = local.create_iam_role && !var.enable_inline_policy ? 1 : 0
+  for_each = !var.enable_inline_policy ? local.controller_policies : {}
 
   role       = aws_iam_role.controller[0].name
-  policy_arn = aws_iam_policy.controller[0].arn
+  policy_arn = aws_iam_policy.controller[each.key].arn
 }
 
 resource "aws_iam_role_policy_attachment" "controller_additional" {
diff --git a/modules/karpenter/migrations.tf b/modules/karpenter/migrations.tf
index b40040f330..630b779195 100644
--- a/modules/karpenter/migrations.tf
+++ b/modules/karpenter/migrations.tf
@@ -75,3 +75,21 @@ moved {
   from = aws_iam_role_policy_attachment.node["arn:aws:iam::aws:policy/AmazonEKS_CNI_Policy"]
   to   = aws_iam_role_policy_attachment.node["AmazonEKS_CNI_Policy"]
 }
+
+# Controller IAM managed policy - the old single policy migrates to NodeLifecycle
+# since it contains the largest set of statements
+moved {
+  from = aws_iam_policy.controller[0]
+  to   = aws_iam_policy.controller["NodeLifecycle"]
+}
+
+moved {
+  from = aws_iam_role_policy_attachment.controller[0]
+  to   = aws_iam_role_policy_attachment.controller["NodeLifecycle"]
+}
+
+# Controller IAM inline policy
+moved {
+  from = aws_iam_role_policy.controller[0]
+  to   = aws_iam_role_policy.controller["NodeLifecycle"]
+}
diff --git a/modules/karpenter/policy.tf b/modules/karpenter/policy.tf
index 34937f36eb..1cee2f82ca 100644
--- a/modules/karpenter/policy.tf
+++ b/modules/karpenter/policy.tf
@@ -1,4 +1,8 @@
-data "aws_iam_policy_document" "controller" {
+################################################################################
+# Node Lifecycle Policy
+################################################################################
+
+data "aws_iam_policy_document" "controller_node_lifecycle" {
   count = local.create_iam_role ? 1 : 0
 
   statement {
@@ -176,55 +180,14 @@ data "aws_iam_policy_document" "controller" {
       values   = ["*"]
     }
   }
+}
 
-  statement {
-    sid       = "AllowRegionalReadActions"
-    resources = ["*"]
-    actions = [
-      "ec2:DescribeCapacityReservations",
-      "ec2:DescribeAvailabilityZones",
-      "ec2:DescribeImages",
-      "ec2:DescribeInstances",
-      "ec2:DescribeInstanceTypeOfferings",
-      "ec2:DescribeInstanceTypes",
-      "ec2:DescribeLaunchTemplates",
-      "ec2:DescribeSecurityGroups",
-      "ec2:DescribeSpotPriceHistory",
-      "ec2:DescribeSubnets"
-    ]
-
-    condition {
-      test     = "StringEquals"
-      variable = "aws:RequestedRegion"
-      values   = [local.region]
-    }
-  }
-
-  statement {
-    sid       = "AllowSSMReadActions"
-    resources = coalescelist(var.ami_id_ssm_parameter_arns, ["arn:${local.partition}:ssm:${local.region}::parameter/aws/service/*"])
-    actions   = ["ssm:GetParameter"]
-  }
-
-  statement {
-    sid       = "AllowPricingReadActions"
-    resources = ["*"]
-    actions   = ["pricing:GetProducts"]
-  }
-
-  dynamic "statement" {
-    for_each = local.enable_spot_termination ? [1] : []
+################################################################################
+# IAM Integration Policy
+################################################################################
 
-    content {
-      sid       = "AllowInterruptionQueueActions"
-      resources = [try(aws_sqs_queue.this[0].arn, null)]
-      actions = [
-        "sqs:DeleteMessage",
-        "sqs:GetQueueUrl",
-        "sqs:ReceiveMessage"
-      ]
-    }
-  }
+data "aws_iam_policy_document" "controller_iam_integration" {
+  count = local.create_iam_role ? 1 : 0
 
   statement {
     sid       = "AllowPassingInstanceRole"
@@ -343,6 +306,63 @@ data "aws_iam_policy_document" "controller" {
       values   = ["*"]
     }
   }
+}
+
+################################################################################
+# EKS Integration Policy
+################################################################################
+
+data "aws_iam_policy_document" "controller_eks_integration" {
+  count = local.create_iam_role ? 1 : 0
+
+  statement {
+    sid       = "AllowAPIServerEndpointDiscovery"
+    resources = ["arn:${local.partition}:eks:${local.region}:${local.account_id}:cluster/${var.cluster_name}"]
+    actions   = ["eks:DescribeCluster"]
+  }
+}
+
+################################################################################
+# Resource Discovery Policy
+################################################################################
+
+data "aws_iam_policy_document" "controller_resource_discovery" {
+  count = local.create_iam_role ? 1 : 0
+
+  statement {
+    sid       = "AllowRegionalReadActions"
+    resources = ["*"]
+    actions = [
+      "ec2:DescribeCapacityReservations",
+      "ec2:DescribeAvailabilityZones",
+      "ec2:DescribeImages",
+      "ec2:DescribeInstances",
+      "ec2:DescribeInstanceTypeOfferings",
+      "ec2:DescribeInstanceTypes",
+      "ec2:DescribeLaunchTemplates",
+      "ec2:DescribeSecurityGroups",
+      "ec2:DescribeSpotPriceHistory",
+      "ec2:DescribeSubnets"
+    ]
+
+    condition {
+      test     = "StringEquals"
+      variable = "aws:RequestedRegion"
+      values   = [local.region]
+    }
+  }
+
+  statement {
+    sid       = "AllowSSMReadActions"
+    resources = coalescelist(var.ami_id_ssm_parameter_arns, ["arn:${local.partition}:ssm:${local.region}::parameter/aws/service/*"])
+    actions   = ["ssm:GetParameter"]
+  }
+
+  statement {
+    sid       = "AllowPricingReadActions"
+    resources = ["*"]
+    actions   = ["pricing:GetProducts"]
+  }
 
   statement {
     sid       = "AllowInstanceProfileReadActions"
@@ -355,12 +375,32 @@ data "aws_iam_policy_document" "controller" {
     resources = ["*"]
     actions   = ["iam:ListInstanceProfiles"]
   }
+}
+
+################################################################################
+# Interruption Policy
+################################################################################
+
+data "aws_iam_policy_document" "controller_interruption" {
+  count = local.create_iam_role && local.enable_spot_termination ? 1 : 0
 
   statement {
-    sid       = "AllowAPIServerEndpointDiscovery"
-    resources = ["arn:${local.partition}:eks:${local.region}:${local.account_id}:cluster/${var.cluster_name}"]
-    actions   = ["eks:DescribeCluster"]
+    sid       = "AllowInterruptionQueueActions"
+    resources = [aws_sqs_queue.this[0].arn]
+    actions = [
+      "sqs:DeleteMessage",
+      "sqs:GetQueueUrl",
+      "sqs:ReceiveMessage"
+    ]
   }
+}
+
+################################################################################
+# Additional Custom Policy Statements
+################################################################################
+
+data "aws_iam_policy_document" "controller_additional" {
+  count = local.create_iam_role && var.iam_policy_statements != null ? 1 : 0
 
   dynamic "statement" {
     for_each = var.iam_policy_statements != null ? var.iam_policy_statements : []