diff --git a/ansible/group_vars/all.yml b/ansible/group_vars/all.yml
index 24772f765c..07a009447f 100644
--- a/ansible/group_vars/all.yml
+++ b/ansible/group_vars/all.yml
@@ -108,7 +108,7 @@ storage_interface: "{{ network_interface }}"
 cluster_interface: "{{ network_interface }}"
 tunnel_interface: "{{ network_interface }}"
 bifrost_network_interface: "{{ network_interface }}"
-
+tunnel_interface_address: "{{ hostvars[inventory_hostname]['ansible_' + tunnel_interface]['ipv4']['address'] }}"
 
 # Valid options are [ openvswitch, linuxbridge, sfc ]
 neutron_plugin_agent: "openvswitch"
diff --git a/ansible/roles/neutron/templates/ml2_conf.ini.j2 b/ansible/roles/neutron/templates/ml2_conf.ini.j2
index f304d023ea..b689440e0d 100644
--- a/ansible/roles/neutron/templates/ml2_conf.ini.j2
+++ b/ansible/roles/neutron/templates/ml2_conf.ini.j2
@@ -69,4 +69,4 @@ physical_interface_mappings = physnet1:{{ neutron_external_interface }}
 [vxlan]
 l2_population = true
 {% endif %}
-local_ip = {{ api_interface_address }}
+local_ip = {{ tunnel_interface_address }}