diff --git a/.gitignore b/.gitignore
index 7b9b5fe32d37..dba0b2fa4faf 100644
--- a/.gitignore
+++ b/.gitignore
@@ -5,9 +5,10 @@ tools/openapispec/openapispec
 **/bin
 bin/*
 .vagrant
-cluster/vagrant/.kubeconfig
-cluster/vagrant/.kubectl
-cluster/vagrant/.oc
+cluster/vagrant-kubernetes/.kubeconfig
+cluster/vagrant-kubernetes/.kubectl
+cluster/vagrant-openshift/.kubeconfig
+cluster/vagrant-openshift/.oc
 cluster/.console.vv
 build-tools/desc/desc
 hack/config-local.sh
@@ -19,7 +20,8 @@ hack/gen-swagger-doc/*.adoc
 hack/gen-swagger-doc/*.md
 hack/gen-swagger-doc/html5
 hack/config-provider-local.sh
-hack/config-provider-vagrant.sh
+hack/config-provider-vagrant-kubernetes.sh
+hack/config-provider-vagrant-openshift.sh
 cluster/local/certs
 **.swp
 **.pem
diff --git a/Vagrantfile b/Vagrantfile
index 9ad7d081bea0..dc773e5369be 100644
--- a/Vagrantfile
+++ b/Vagrantfile
@@ -10,7 +10,7 @@ Calling 'vagrant up' directly is not supported.  Instead, please run the followi
 END
 end
 
-$deploy_openshift = ENV['DEPLOY_OPENSHIFT'] == 'true'
+$provider = ENV['PROVIDER'] || "vagrant-kubernetes"
 $use_nfs = ENV['VAGRANT_USE_NFS'] == 'true'
 $use_rng = ENV['VAGRANT_USE_RNG'] == 'true'
 $cache_docker = ENV['VAGRANT_CACHE_DOCKER'] == 'true'
@@ -31,6 +31,15 @@ end
 $master_ip = $config["master_ip"]
 $network_provider = $config["network_provider"]
 
+$common_setup = <<SCRIPT
+#!/bin/bash
+set -xe
+sed -i -e "s/PasswordAuthentication no/PasswordAuthentication yes/" /etc/ssh/sshd_config
+systemctl restart sshd
+# FIXME, sometimes eth1 does not come up on Vagrant on latest fc26
+sudo ifup eth1
+SCRIPT
+
 Vagrant.configure(2) do |config|
   config.vm.box = "centos7"
   config.vm.box_url = "http://cloud.centos.org/centos/7/vagrant/x86_64/images/CentOS-7-x86_64-Vagrant-1608_01.LibVirt.box"
@@ -71,10 +80,7 @@ Vagrant.configure(2) do |config|
       rsync__args: ["--archive", "--delete"]
   end
 
-  config.vm.provision "shell" do |s|
-    s.path = "cluster/vagrant/setup_common.sh"
-    s.args = ["#{$master_ip}", "#{$nodes}"]
-  end
+  config.vm.provision "shell", inline: $common_setup
 
   config.vm.define "master" do |master|
       master.vm.hostname = "master"
@@ -87,11 +93,7 @@ Vagrant.configure(2) do |config|
       end
 
       master.vm.provision "shell" do |s|
-        if $deploy_openshift then
-          s.path = "cluster/vagrant/setup_openshift_master.sh"
-        else
-          s.path = "cluster/vagrant/setup_kubernetes_master.sh"
-        end
+        s.path = "cluster/#{$provider}/setup_master.sh"
         s.args = ["#{$master_ip}", "#{$nodes}", "#{$network_provider}"]
       end
   end
@@ -110,12 +112,8 @@ Vagrant.configure(2) do |config|
       end
 
       node.vm.provision "shell" do |s|
-        if $deploy_openshift then
-          s.path = "cluster/vagrant/setup_openshift_common.sh"
-        else
-          s.path = "cluster/vagrant/setup_kubernetes_node.sh"
-        end
-        s.args = ["#{$master_ip}"]
+        s.path = "cluster/#{$provider}/setup_node.sh"
+        s.args = ["#{$master_ip}", "#{$nodes}"]
       end
     end
   end
diff --git a/cluster/build.sh b/cluster/build.sh
index 5880d248a150..a579d0480d91 100755
--- a/cluster/build.sh
+++ b/cluster/build.sh
@@ -21,7 +21,7 @@
 # We're leaving this file around for people who still reference this
 # specific script in their development workflow.
 
-PROVIDER=${PROVIDER:-vagrant}
+PROVIDER=${PROVIDER:-vagrant-kubernetes}
 source cluster/$PROVIDER/provider.sh
 
 build
diff --git a/cluster/deploy.sh b/cluster/deploy.sh
index 971dafe40fc7..f6731a084a14 100755
--- a/cluster/deploy.sh
+++ b/cluster/deploy.sh
@@ -19,7 +19,7 @@
 
 set -ex
 
-PROVIDER=${PROVIDER:-vagrant}
+PROVIDER=${PROVIDER:-vagrant-kubernetes}
 
 source hack/common.sh
 source cluster/$PROVIDER/provider.sh
@@ -51,4 +51,8 @@ fi
 # Deploy additional infra for testing
 _kubectl create -f ${MANIFESTS_OUT_DIR}/testing -R $i
 
+if [ "$PROVIDER" = "vagrant-openshift" ]; then
+	_kubectl adm policy add-scc-to-user privileged -z kubevirt-infra -n kube-system
+fi
+
 echo "Done"
diff --git a/cluster/down.sh b/cluster/down.sh
index 37999b26ad54..f7c958d892f5 100755
--- a/cluster/down.sh
+++ b/cluster/down.sh
@@ -1,5 +1,5 @@
 #!/bin/bash
 
-PROVIDER=${PROVIDER:-vagrant}
+PROVIDER=${PROVIDER:-vagrant-kubernetes}
 source cluster/$PROVIDER/provider.sh
 down
diff --git a/cluster/kubectl.sh b/cluster/kubectl.sh
index 52cc01c4eb33..5db1e94795b2 100755
--- a/cluster/kubectl.sh
+++ b/cluster/kubectl.sh
@@ -21,7 +21,7 @@ set -e
 
 source $(dirname "$0")/../hack/common.sh
 
-PROVIDER=${PROVIDER:-vagrant}
+PROVIDER=${PROVIDER:-vagrant-kubernetes}
 source ${KUBEVIRT_DIR}/cluster/$PROVIDER/provider.sh
 source ${KUBEVIRT_DIR}/hack/config.sh
 
diff --git a/cluster/up.sh b/cluster/up.sh
index f9b901dd7d1e..1071b2426859 100755
--- a/cluster/up.sh
+++ b/cluster/up.sh
@@ -1,5 +1,5 @@
 #!/bin/bash
 
-PROVIDER=${PROVIDER:-vagrant}
+PROVIDER=${PROVIDER:-vagrant-kubernetes}
 source cluster/$PROVIDER/provider.sh
 up
diff --git a/cluster/vagrant-kubernetes/README.md b/cluster/vagrant-kubernetes/README.md
new file mode 100644
index 000000000000..ebb8ba6e74a2
--- /dev/null
+++ b/cluster/vagrant-kubernetes/README.md
@@ -0,0 +1,5 @@
+The purpose of this folder is to hold all relevant stuff to deploy
+KubeVirt on kubernetes cluster in a vagrant box.
+
+Thus this folder primarily contains
+- The deployment scripts for master and nodes
diff --git a/cluster/vagrant/provider.sh b/cluster/vagrant-kubernetes/provider.sh
similarity index 75%
rename from cluster/vagrant/provider.sh
rename to cluster/vagrant-kubernetes/provider.sh
index 6d203347c6ba..bf76053f89eb 100644
--- a/cluster/vagrant/provider.sh
+++ b/cluster/vagrant-kubernetes/provider.sh
@@ -17,10 +17,10 @@ function up() {
 
     OPTIONS=$(vagrant ssh-config master | grep -v '^Host ' | awk -v ORS=' ' 'NF{print "-o " $1 "=" $2}')
 
-    scp $OPTIONS master:/usr/bin/kubectl ${KUBEVIRT_PATH}cluster/vagrant/.kubectl
-    chmod u+x cluster/vagrant/.kubectl
+    scp $OPTIONS master:/usr/bin/kubectl ${KUBEVIRT_PATH}cluster/vagrant-kubernetes/.kubectl
+    chmod u+x cluster/vagrant-kubernetes/.kubectl
 
-    vagrant ssh master -c "sudo cat /etc/kubernetes/admin.conf" >${KUBEVIRT_PATH}cluster/vagrant/.kubeconfig
+    vagrant ssh master -c "sudo cat /etc/kubernetes/admin.conf" >${KUBEVIRT_PATH}cluster/vagrant-kubernetes/.kubeconfig
 
     # Make sure that local config is correct
     prepare_config
@@ -28,10 +28,10 @@ function up() {
 
 function prepare_config() {
     BASE_PATH=${KUBEVIRT_PATH:-$PWD}
-    cat >hack/config-provider-vagrant.sh <<EOF
+    cat >hack/config-provider-vagrant-kubernetes.sh <<EOF
 master_ip=$(_main_ip)
 docker_tag=devel
-kubeconfig=${BASE_PATH}/cluster/vagrant/.kubeconfig
+kubeconfig=${BASE_PATH}/cluster/vagrant-kubernetes/.kubeconfig
 EOF
 }
 
@@ -44,8 +44,8 @@ function build() {
 }
 
 function _kubectl() {
-    export KUBECONFIG=${KUBEVIRT_PATH}cluster/vagrant/.kubeconfig
-    ${KUBEVIRT_PATH}cluster/vagrant/.kubectl "$@"
+    export KUBECONFIG=${KUBEVIRT_PATH}cluster/vagrant-kubernetes/.kubeconfig
+    ${KUBEVIRT_PATH}cluster/vagrant-kubernetes/.kubectl "$@"
 }
 
 function down() {
diff --git a/cluster/vagrant/setup_kubernetes_common.sh b/cluster/vagrant-kubernetes/setup_common.sh
similarity index 100%
rename from cluster/vagrant/setup_kubernetes_common.sh
rename to cluster/vagrant-kubernetes/setup_common.sh
diff --git a/cluster/vagrant/setup_kubernetes_master.sh b/cluster/vagrant-kubernetes/setup_master.sh
similarity index 97%
rename from cluster/vagrant/setup_kubernetes_master.sh
rename to cluster/vagrant-kubernetes/setup_master.sh
index 3640ad98b6f7..50409a7df1ee 100755
--- a/cluster/vagrant/setup_kubernetes_master.sh
+++ b/cluster/vagrant-kubernetes/setup_master.sh
@@ -20,7 +20,7 @@ master_ip=$1
 network_provider=$3
 
 export KUBERNETES_MASTER=true
-bash /vagrant/cluster/vagrant/setup_kubernetes_common.sh
+bash /vagrant/cluster/vagrant-kubernetes/setup_common.sh
 
 # Cockpit with kubernetes plugin
 yum install -y cockpit cockpit-kubernetes
diff --git a/cluster/vagrant/setup_kubernetes_node.sh b/cluster/vagrant-kubernetes/setup_node.sh
similarity index 96%
rename from cluster/vagrant/setup_kubernetes_node.sh
rename to cluster/vagrant-kubernetes/setup_node.sh
index d5faf0c16474..8d90a039959f 100755
--- a/cluster/vagrant/setup_kubernetes_node.sh
+++ b/cluster/vagrant-kubernetes/setup_node.sh
@@ -18,7 +18,7 @@
 #
 master_ip=$1
 
-bash /vagrant/cluster/vagrant/setup_kubernetes_common.sh
+bash /vagrant/cluster/vagrant-kubernetes/setup_common.sh
 
 ADVERTISED_MASTER_IP=$(sshpass -p vagrant ssh -oStrictHostKeyChecking=no vagrant@$master_ip hostname -I | cut -d " " -f1)
 set +e
diff --git a/cluster/vagrant/README.md b/cluster/vagrant-openshift/README.md
similarity index 75%
rename from cluster/vagrant/README.md
rename to cluster/vagrant-openshift/README.md
index affe0c4bfe01..fab946c9d617 100644
--- a/cluster/vagrant/README.md
+++ b/cluster/vagrant-openshift/README.md
@@ -1,5 +1,5 @@
 The purpose of this folder is to hold all relevant stuff to deploy
-KubeVirt in a vagrant box.
+KubeVirt on OpenShift cluster in a vagrant box.
 
 Thus this folder primarily contains
 - The deployment scripts for master and nodes
diff --git a/cluster/vagrant-openshift/provider.sh b/cluster/vagrant-openshift/provider.sh
new file mode 100644
index 000000000000..d84ee2cde0dd
--- /dev/null
+++ b/cluster/vagrant-openshift/provider.sh
@@ -0,0 +1,53 @@
+#!/bin/bash
+
+function _main_ip() {
+    echo 192.168.200.2
+}
+
+function up() {
+    export USING_KUBE_SCRIPTS=true
+    # Make sure that the vagrant environment is up and running
+    vagrant up --provider=libvirt
+    # Synchronize kubectl config
+    vagrant ssh-config master 2>&1 | grep "not yet ready for SSH" >/dev/null &&
+        {
+            echo "Master node is not up"
+            exit 1
+        }
+
+    OPTIONS=$(vagrant ssh-config master | grep -v '^Host ' | awk -v ORS=' ' 'NF{print "-o " $1 "=" $2}')
+
+    scp $OPTIONS master:/bin/oc ${KUBEVIRT_PATH}cluster/vagrant-openshift/.oc
+    chmod u+x cluster/vagrant-openshift/.oc
+
+    vagrant ssh master -c "sudo cat /etc/origin/master/openshift-master.kubeconfig" >${KUBEVIRT_PATH}cluster/vagrant-openshift/.kubeconfig
+
+    # Make sure that local config is correct
+    prepare_config
+}
+
+function prepare_config() {
+    BASE_PATH=${KUBEVIRT_PATH:-$PWD}
+    cat >hack/config-provider-vagrant-openshift.sh <<EOF
+master_ip=$(_main_ip)
+docker_tag=devel
+kubeconfig=${BASE_PATH}/cluster/vagrant-openshift/.kubeconfig
+EOF
+}
+
+function build() {
+    make build manifests
+    for VM in $(vagrant status | grep -v "^The Libvirt domain is running." | grep running | cut -d " " -f1); do
+        vagrant rsync $VM # if you do not use NFS
+        vagrant ssh $VM -c "cd /vagrant && export DOCKER_TAG=${docker_tag} && sudo -E hack/build-docker.sh build &&  sudo -E hack/build-docker.sh build optional"
+    done
+}
+
+function _kubectl() {
+    export KUBECONFIG=${KUBEVIRT_PATH}cluster/vagrant-openshift/.kubeconfig
+    ${KUBEVIRT_PATH}cluster/vagrant-openshift/.oc "$@"
+}
+
+function down() {
+    vagrant halt
+}
diff --git a/cluster/vagrant-openshift/setup_common.sh b/cluster/vagrant-openshift/setup_common.sh
new file mode 100644
index 000000000000..c91e4ba84838
--- /dev/null
+++ b/cluster/vagrant-openshift/setup_common.sh
@@ -0,0 +1,36 @@
+#/bin/bash -xe
+#
+# This file is part of the KubeVirt project
+#
+# Licensed under the Apache License, Version 2.0 (the "License");
+# you may not use this file except in compliance with the License.
+# You may obtain a copy of the License at
+#
+#     http://www.apache.org/licenses/LICENSE-2.0
+#
+# Unless required by applicable law or agreed to in writing, software
+# distributed under the License is distributed on an "AS IS" BASIS,
+# WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+# See the License for the specific language governing permissions and
+# limitations under the License.
+#
+# Copyright 2017 Red Hat, Inc.
+#
+
+# Enter master and nodes to /etc/hosts
+sed -i "/$(hostname)/d" /etc/hosts
+grep 'master' /etc/hosts || echo "$1 master" >> /etc/hosts
+IFS=. read ip1 ip2 ip3 ip4 <<< "$1"
+for node in $(seq 0 $(($2 - 1))); do
+  node_hostname="node$node"
+  node_ip="$ip1.$ip2.$ip3.$(($ip4 + node + 1))"
+  grep $node_hostname /etc/hosts || echo "$node_ip $node_hostname" >> /etc/hosts
+done
+
+# Install OpenShift packages
+yum install -y centos-release-openshift-origin
+yum install -y wget git net-tools bind-utils iptables-services bridge-utils bash-completion kexec-tools sos psacct docker
+systemctl start docker
+systemctl enable docker
+yum -y update
+yum --enablerepo=centos-openshift-origin-testing install -y atomic-openshift-utils
diff --git a/cluster/vagrant/setup_openshift_master.sh b/cluster/vagrant-openshift/setup_master.sh
similarity index 56%
rename from cluster/vagrant/setup_openshift_master.sh
rename to cluster/vagrant-openshift/setup_master.sh
index ea50842ed364..ad2d63fb90c0 100644
--- a/cluster/vagrant/setup_openshift_master.sh
+++ b/cluster/vagrant-openshift/setup_master.sh
@@ -1,17 +1,40 @@
-#!/bin/bash
+#/bin/bash -xe
+#
+# This file is part of the KubeVirt project
+#
+# Licensed under the Apache License, Version 2.0 (the "License");
+# you may not use this file except in compliance with the License.
+# You may obtain a copy of the License at
+#
+#     http://www.apache.org/licenses/LICENSE-2.0
+#
+# Unless required by applicable law or agreed to in writing, software
+# distributed under the License is distributed on an "AS IS" BASIS,
+# WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+# See the License for the specific language governing permissions and
+# limitations under the License.
+#
+# Copyright 2017 Red Hat, Inc.
+#
+
 master_ip=$1
 nodes=$2
 
-bash /vagrant/cluster/vagrant/setup_openshift_common.sh
+bash /vagrant/cluster/vagrant-openshift/setup_common.sh $master_ip $nodes
 
+# Disable host key checking under ansible.cfg file
 sed -i '/host_key_checking/s/^#//g' /etc/ansible/ansible.cfg
+
+# Save nodes to add it under ansible inventory file
+inv_nodes=""
 IFS=. read ip1 ip2 ip3 ip4 <<< "$master_ip"
-nodes=""
-for node in $(seq 0 $(($2 - 1))); do
+for node in $(seq 0 $(($nodes - 1))); do
   node_ip="$ip1.$ip2.$ip3.$(($ip4 + node + 1))"
   node_hostname="node$node openshift_node_labels=\"{'region': 'infra','zone': 'default'}\" openshift_ip=$node_ip"
-  nodes="$nodes$node_hostname\n"
+  inv_nodes="$inv_nodes$node_hostname\n"
 done
+
+# Create ansible inventory file
 cat > inventory <<EOF
 [OSEv3:children]
 masters
@@ -34,10 +57,11 @@ master openshift_ip=$master_ip
 
 [nodes]
 master openshift_node_labels="{'region': 'infra','zone': 'default'}" openshift_schedulable=true openshift_ip=$master_ip
-$nodes
+$inv_nodes
 
 EOF
 
+# Run OpenShift ansible playbook
 ansible-playbook -i inventory /usr/share/ansible/openshift-ansible/playbooks/byo/config.yml
 
 # Create OpenShift user
diff --git a/cluster/vagrant-openshift/setup_node.sh b/cluster/vagrant-openshift/setup_node.sh
new file mode 100644
index 000000000000..63246f728a31
--- /dev/null
+++ b/cluster/vagrant-openshift/setup_node.sh
@@ -0,0 +1,23 @@
+#/bin/bash -xe
+#
+# This file is part of the KubeVirt project
+#
+# Licensed under the Apache License, Version 2.0 (the "License");
+# you may not use this file except in compliance with the License.
+# You may obtain a copy of the License at
+#
+#     http://www.apache.org/licenses/LICENSE-2.0
+#
+# Unless required by applicable law or agreed to in writing, software
+# distributed under the License is distributed on an "AS IS" BASIS,
+# WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+# See the License for the specific language governing permissions and
+# limitations under the License.
+#
+# Copyright 2017 Red Hat, Inc.
+#
+
+master_ip=$1
+nodes=$2
+
+bash /vagrant/cluster/vagrant-openshift/setup_common.sh $master_ip $nodes
diff --git a/cluster/vagrant/setup_common.sh b/cluster/vagrant/setup_common.sh
deleted file mode 100644
index b18c84096cc8..000000000000
--- a/cluster/vagrant/setup_common.sh
+++ /dev/null
@@ -1,16 +0,0 @@
-#!/bin/bash
-master_ip=$1
-nodes=$2
-
-sed -i -e "s/PasswordAuthentication no/PasswordAuthentication yes/" /etc/ssh/sshd_config
-systemctl restart sshd
-# FIXME, sometimes eth1 does not come up on Vagrant on latest fc26
-sudo ifup eth1
-sed -i "/$(hostname)/d" /etc/hosts
-grep 'master' /etc/hosts || echo "$master_ip master" >> /etc/hosts
-IFS=. read ip1 ip2 ip3 ip4 <<< "$master_ip"
-for node in $(seq 0 $(($nodes - 1))); do
-  node_hostname="node$node"
-  node_ip="$ip1.$ip2.$ip3.$(($ip4 + node + 1))"
-  grep $node_hostname /etc/hosts || echo "$node_ip $node_hostname" >> /etc/hosts
-done
diff --git a/cluster/vagrant/setup_openshift_common.sh b/cluster/vagrant/setup_openshift_common.sh
deleted file mode 100644
index ddb0fd93261b..000000000000
--- a/cluster/vagrant/setup_openshift_common.sh
+++ /dev/null
@@ -1,6 +0,0 @@
-yum install -y centos-release-openshift-origin
-yum install -y wget git net-tools bind-utils iptables-services bridge-utils bash-completion kexec-tools sos psacct docker
-systemctl start docker
-systemctl enable docker
-yum -y update
-yum --enablerepo=centos-openshift-origin-testing install -y atomic-openshift-utils
diff --git a/hack/config.sh b/hack/config.sh
index 0479105f42da..5914f075ff34 100644
--- a/hack/config.sh
+++ b/hack/config.sh
@@ -1,7 +1,7 @@
 unset binaries docker_images docker_prefix docker_tag manifest_templates \
     master_ip network_provider kubeconfig
 
-PROVIDER=${PROVIDER:-vagrant}
+PROVIDER=${PROVIDER:-vagrant-kubernetes}
 
 source ${KUBEVIRT_PATH}hack/config-default.sh source ${KUBEVIRT_PATH}hack/config-${PROVIDER}.sh
 
diff --git a/images/libvirt-kubevirt/Dockerfile b/images/libvirt-kubevirt/Dockerfile
index afee665255af..7085497bbaec 100644
--- a/images/libvirt-kubevirt/Dockerfile
+++ b/images/libvirt-kubevirt/Dockerfile
@@ -26,6 +26,7 @@ RUN dnf install -y \
   util-linux \
   libcgroup-tools \
   ethtool \
+  policycoreutils-python-utils \
   sudo && dnf -y clean all && \
   test $(id -u qemu) = 107 # make sure that the qemu user really is 107