diff --git a/data/publiccloud/cloud-init.yaml b/data/publiccloud/cloud-init.yaml
deleted file mode 100644
index e35299de115b..000000000000
--- a/data/publiccloud/cloud-init.yaml
+++ /dev/null
@@ -1,22 +0,0 @@
-#cloud-config
-
-bootcmd:
-- [sh, -c, "echo pookie >> /root/test_cloud-init.txt"]
-
-runcmd:
-- [ sh, -c, "echo Mithrandir >> /root/test_cloud-init.txt" ]
-
-write_files:
-- content: snickerdoodle
-  path: /root/test_cloud-init.txt
-  append: true
-
-packages:
-- ed
-
-final_message: |
-  cloud-init qa has finished
-  version: $version
-  timestamp: $timestamp
-  datasource: $datasource
-  uptime: $uptime
diff --git a/data/publiccloud/terraform/azure.tf b/data/publiccloud/terraform/azure.tf
index 8611b7429dbe..6d6f9a86df56 100644
--- a/data/publiccloud/terraform/azure.tf
+++ b/data/publiccloud/terraform/azure.tf
@@ -63,10 +63,6 @@ variable "create-extra-disk" {
   default = false
 }
 
-variable "cloud_init" {
-  default = ""
-}
-
 variable "storage-account" {
   # Note: Don't delete the default value!!!
   # Not all of our `terraform destroy` calls pass this variable and neither is it necessary.
@@ -201,8 +197,6 @@ resource "azurerm_linux_virtual_machine" "openqa-vm" {
   timeouts {
     create = var.vm_create_timeout
   }
-
-  custom_data = var.cloud_init != "" ? filebase64(var.cloud_init) : null
 }
 
 resource "azurerm_virtual_machine_data_disk_attachment" "default" {
diff --git a/data/publiccloud/terraform/ec2.tf b/data/publiccloud/terraform/ec2.tf
index 9cb94316c4cf..9d9bc4fe11c4 100644
--- a/data/publiccloud/terraform/ec2.tf
+++ b/data/publiccloud/terraform/ec2.tf
@@ -35,10 +35,6 @@ variable "image_id" {
   default = ""
 }
 
-variable "cloud_init" {
-  default = ""
-}
-
 variable "extra-disk-size" {
   default = "1000"
 }
@@ -129,8 +125,6 @@ resource "aws_instance" "openqa" {
       amd_sev_snp = var.enable_confidential_vm
     }
   }
-
-  user_data = var.cloud_init != "" ? file(var.cloud_init) : null
 }
 
 resource "aws_volume_attachment" "ebs_att" {
diff --git a/lib/publiccloud/instance.pm b/lib/publiccloud/instance.pm
index c18eee9f9e5a..698d1c08adeb 100644
--- a/lib/publiccloud/instance.pm
+++ b/lib/publiccloud/instance.pm
@@ -604,47 +604,6 @@ sub network_speed_test() {
     record_info("curl $rmt_host", $self->run_ssh_command(cmd => "curl -w '$write_out' -o /dev/null -v https://$rmt_host/", proceed_on_failure => 1));
 }
 
-sub cleanup_cloudinit() {
-    my ($self) = @_;
-    $self->ssh_assert_script_run('sudo cloud-init clean --logs');
-    if (get_var('PUBLIC_CLOUD_CLOUD_INIT')) {
-        $self->ssh_assert_script_run('sudo rm /root/test_cloud-init.txt');
-        $self->ssh_assert_script_run('sudo zypper -n rm ed');
-    }
-}
-
-sub check_cloudinit() {
-    my ($self) = @_;
-
-    # cloud-init status
-    $self->ssh_script_retry(cmd => "sudo cloud-init status", timeout => 90, retry => 12, delay => 15);
-    $self->ssh_script_retry(cmd => "sudo cloud-init status --long", timeout => 90, retry => 12, delay => 15);
-
-    # cloud-id
-    my $cloud_id = (is_azure) ? 'azure' : 'aws';
-    $self->ssh_script_output(cmd => "sudo cloud-id | grep '^$cloud_id\$'");
-
-    # cloud-init collect-logs
-    $self->ssh_assert_script_run('sudo cloud-init collect-logs');
-    $self->upload_log('~/cloud-init.tar.gz', failok => 1);
-
-    if (get_var('PUBLIC_CLOUD_CLOUD_INIT')) {
-        # Check for bootcmd, runcmd and write_files module
-        $self->ssh_assert_script_run('sudo grep pookie /root/test_cloud-init.txt');
-        $self->ssh_assert_script_run('sudo grep Mithrandir /root/test_cloud-init.txt');
-        $self->ssh_assert_script_run('sudo grep snickerdoodle /root/test_cloud-init.txt');
-
-        # Check for packages module
-        $self->ssh_assert_script_run('ed -V');
-
-        # Check for final_message module
-        $self->ssh_assert_script_run('sudo journalctl -b | grep "cloud-init qa has finished"');
-
-        # cloud-init schema
-        $self->ssh_assert_script_run('sudo cloud-init schema --system') unless (is_sle('=12-SP5'));
-    }
-}
-
 =head2 measure_boottime
 
     measure_boottime();
diff --git a/lib/publiccloud/provider.pm b/lib/publiccloud/provider.pm
index b473971c6e3c..5960265e9361 100644
--- a/lib/publiccloud/provider.pm
+++ b/lib/publiccloud/provider.pm
@@ -431,8 +431,6 @@ sub terraform_prepare_env {
     else {
         $file = get_var('PUBLIC_CLOUD_TERRAFORM_FILE', "publiccloud/terraform/$file.tf");
         assert_script_run('curl ' . data_url("$file") . ' -o ' . TERRAFORM_DIR . '/plan.tf');
-        my $cloud_init = get_var('PUBLIC_CLOUD_CLOUD_INIT');
-        assert_script_run('curl ' . data_url("publiccloud/cloud-init.yaml") . ' -o ' . TERRAFORM_DIR . "/cloud-init.yaml") if ($cloud_init);
     }
     $self->terraform_env_prepared(1);
 }
@@ -539,8 +537,6 @@ sub terraform_apply {
         $cmd .= "-var 'region=" . $self->provider_client->region . "' ";
         $cmd .= "-var 'name=" . $self->resource_name . "' ";
         $cmd .= "-var 'project=" . $args{project} . "' " if $args{project};
-        my $cloud_init = get_var('PUBLIC_CLOUD_CLOUD_INIT');
-        $cmd .= "-var 'cloud_init=" . TERRAFORM_DIR . "/cloud-init.yaml' " if ($cloud_init);
         $cmd .= "-var 'enable_confidential_vm=true' " if ($args{confidential_compute} && is_gce());
         $cmd .= "-var 'enable_confidential_vm=enabled' " if ($args{confidential_compute} && is_ec2());
         $cmd .= "-var 'vm_create_timeout=" . $terraform_vm_create_timeout . "' " if $terraform_vm_create_timeout;
@@ -649,8 +645,6 @@ sub terraform_destroy {
         assert_script_run('cd ' . TERRAFORM_DIR);
         # Add region variable also to `terraform destroy` (poo#63604) -- needed by AWS.
         $cmd .= "-var 'region=" . $self->provider_client->region . "' ";
-        my $cloud_init = get_var('PUBLIC_CLOUD_CLOUD_INIT');
-        $cmd .= "-var 'cloud_init=" . TERRAFORM_DIR . "/cloud-init.yaml' " if ($cloud_init);
         unless (is_openstack) {
             $cmd .= "-var 'ssh_public_key=" . $self->ssh_key . ".pub' ";
         }
diff --git a/lib/publiccloud/utils.pm b/lib/publiccloud/utils.pm
index 93303656effb..d27c8f4316a1 100644
--- a/lib/publiccloud/utils.pm
+++ b/lib/publiccloud/utils.pm
@@ -18,7 +18,7 @@ use strict;
 use warnings;
 use testapi;
 use utils;
-use version_utils qw(is_sle is_public_cloud get_version_id is_transactional is_openstack is_sle_micro);
+use version_utils qw(is_sle is_public_cloud get_version_id is_transactional is_openstack);
 use transactional qw(check_reboot_changes trup_call process_reboot);
 use registration;
 use maintenance_smelt qw(is_embargo_update);
@@ -38,14 +38,12 @@ our @EXPORT = qw(
   is_gce
   is_container_host
   is_hardened
-  is_cloudinit_supported
   registercloudguest
   register_addon
   register_openstack
   register_addons_in_pc
   gcloud_install
   get_ssh_private_key_path
-  permit_root_passwordless
   prepare_ssh_tunnel
   kill_packagekit
   allow_openqa_port_selinux
@@ -194,10 +192,6 @@ sub is_hardened() {
     return is_public_cloud && get_var('FLAVOR') =~ 'Hardened';
 }
 
-sub is_cloudinit_supported {
-    return ((is_azure || is_ec2) && !is_sle_micro);
-}
-
 # Get credentials from the Public Cloud micro service, which requires user
 # and password. The resulting json will be stored in a file.
 sub get_credentials {
@@ -266,20 +260,6 @@ sub get_ssh_private_key_path {
     return (is_azure() || is_openstack() || get_var('PUBLIC_CLOUD_LTP')) ? "~/.ssh/id_rsa" : '~/.ssh/id_ed25519';
 }
 
-sub permit_root_passwordless {
-    my ($instance) = @_;
-
-    # Permit root passwordless login over SSH
-    $instance->ssh_assert_script_run('sudo mkdir -p /etc/ssh/sshd_config.d/');
-    $instance->ssh_assert_script_run('echo "PermitRootLogin prohibit-password" | sudo tee /etc/ssh/sshd_config.d/001_sshd_openqa.conf');
-    $instance->ssh_assert_script_run('echo "AllowTcpForwarding yes" | sudo tee -a /etc/ssh/sshd_config.d/001_sshd_openqa.conf') if (is_hardened());
-    $instance->ssh_assert_script_run('sudo systemctl reload sshd');
-
-    # Copy SSH settings for remote root
-    $instance->ssh_assert_script_run('sudo install -o root -g root -m 0700 -dD /root/.ssh');
-    $instance->ssh_assert_script_run(sprintf("sudo install -o root -g root -m 0644 /home/%s/.ssh/authorized_keys /root/.ssh/", $instance->{username}));
-}
-
 sub prepare_ssh_tunnel {
     my ($instance) = @_;
 
@@ -298,7 +278,15 @@ sub prepare_ssh_tunnel {
     # Skip setting root password for img_proof, because it expects the root password to NOT be set
     $instance->ssh_assert_script_run(qq(echo -e "$testapi::password\\n$testapi::password" | sudo passwd root));
 
-    permit_root_passwordless($instance);
+    # Permit root passwordless login over SSH
+    $instance->ssh_assert_script_run('sudo cat /etc/ssh/sshd_config');
+    $instance->ssh_assert_script_run('sudo sed -i "s/PermitRootLogin no/PermitRootLogin prohibit-password/g" /etc/ssh/sshd_config');
+    $instance->ssh_assert_script_run('sudo sed -i "/^AllowTcpForwarding/c\AllowTcpForwarding yes" /etc/ssh/sshd_config') if (is_hardened());
+    $instance->ssh_assert_script_run('sudo systemctl reload sshd');
+
+    # Copy SSH settings for remote root
+    $instance->ssh_assert_script_run('sudo install -o root -g root -m 0700 -dD /root/.ssh');
+    $instance->ssh_assert_script_run(sprintf("sudo install -o root -g root -m 0644 /home/%s/.ssh/authorized_keys /root/.ssh/", $instance->{username}));
 
     # Create remote user and set him a password
     my $path = (is_sle('>15') && is_sle('<15-SP3')) ? '/usr/sbin/' : '';
diff --git a/tests/publiccloud/check_services.pm b/tests/publiccloud/check_services.pm
index 03a93eefada9..53eec1783215 100644
--- a/tests/publiccloud/check_services.pm
+++ b/tests/publiccloud/check_services.pm
@@ -37,7 +37,7 @@ sub run {
 
     # cloud-init
     # cloud-init is notavailable in Micro
-    if (is_cloudinit_supported) {
+    if ((is_azure || is_ec2) && !is_sle_micro) {
         record_info('cloud-init', $instance->ssh_script_output('systemctl --no-pager --full status cloud-init*', proceed_on_failure => 1));
         $instance->ssh_assert_script_run('systemctl is-active cloud-init.service');
         $instance->ssh_assert_script_run('systemctl is-active cloud-init.target');
diff --git a/tests/publiccloud/patch_and_reboot.pm b/tests/publiccloud/patch_and_reboot.pm
index 3d9db76eebd6..efa01d0b89df 100644
--- a/tests/publiccloud/patch_and_reboot.pm
+++ b/tests/publiccloud/patch_and_reboot.pm
@@ -14,7 +14,7 @@ use warnings;
 use testapi;
 use strict;
 use utils qw(ssh_fully_patch_system);
-use publiccloud::utils qw(kill_packagekit ssh_update_transactional_system is_cloudinit_supported permit_root_passwordless);
+use publiccloud::utils qw(kill_packagekit ssh_update_transactional_system);
 use publiccloud::ssh_interactive qw(select_host_console);
 use version_utils qw(is_sle_micro);
 
@@ -38,13 +38,7 @@ sub run {
     record_info('UNAME', $args->{my_instance}->ssh_script_output(cmd => 'uname -a'));
     $args->{my_instance}->ssh_assert_script_run(cmd => 'rpm -qa > /tmp/rpm-qa.txt');
     $args->{my_instance}->upload_log('/tmp/rpm-qa.txt');
-    $args->{my_instance}->cleanup_cloudinit() if (is_cloudinit_supported);
     $args->{my_instance}->softreboot(timeout => get_var('PUBLIC_CLOUD_REBOOT_TIMEOUT', 600));
-
-    if (is_cloudinit_supported) {
-        $args->{my_instance}->check_cloudinit();
-        permit_root_passwordless($args->{my_instance});
-    }
 }
 
 sub test_flags {
diff --git a/tests/publiccloud/prepare_instance.pm b/tests/publiccloud/prepare_instance.pm
index 2842f24c3ae5..6529f31fa766 100644
--- a/tests/publiccloud/prepare_instance.pm
+++ b/tests/publiccloud/prepare_instance.pm
@@ -44,7 +44,6 @@ sub run {
     $instance->ssh_opts("");    # Clear $instance->ssh_opts which ombit the known hosts file and strict host checking by default
 
     $instance->network_speed_test();
-    $instance->check_cloudinit() if (is_cloudinit_supported);
 
     # ssh-tunnel settings
     prepare_ssh_tunnel($instance) if (is_tunneled());
diff --git a/variables.md b/variables.md
index 957f7e2cb020..b92126cc4e02 100644
--- a/variables.md
+++ b/variables.md
@@ -325,7 +325,6 @@ PUBLIC_CLOUD_GCE_STACK_TYPE | string | IPV4_ONLY | Network stack type, possible
 PUBLIC_CLOUD_FIO | boolean | false | If set, storage_perf test module is added to the job.
 PUBLIC_CLOUD_FIO_RUNTIME | integer | 300 | Set the execution time for each FIO tests.
 PUBLIC_CLOUD_FIO_SSD_SIZE | string | "100G" | Set the additional disk size for the FIO tests.
-PUBLIC_CLOUD_CLOUD_INIT | boolean | false | If this is true custom `cloud-config` will be attached to the instance.
 PUBLIC_CLOUD_FORCE_REGISTRATION | boolean | false | If set, tests/publiccloud/registration.pm will register cloud guest
 PUBLIC_CLOUD_IGNORE_EMPTY_REPO | boolean | false | Ignore empty maintenance update repos
 PUBLIC_CLOUD_IMAGE_ID | string | "" | The image ID we start the instance from