diff --git a/controllers/cluster_controller_test.go b/controllers/cluster_controller_test.go
index 799e28f7a4eb..7ff79d37a26e 100644
--- a/controllers/cluster_controller_test.go
+++ b/controllers/cluster_controller_test.go
@@ -728,7 +728,23 @@ func TestClusterReconcilerReconcileSelfManagedClusterConditions(t *testing.T) {
 			iam.EXPECT().EnsureCASecret(logCtx, gomock.AssignableToTypeOf(logr.Logger{}), sameName(config.Cluster)).Return(controller.Result{}, nil)
 			iam.EXPECT().Reconcile(logCtx, gomock.AssignableToTypeOf(logr.Logger{}), sameName(config.Cluster)).Return(controller.Result{}, nil)
 
-			providerReconciler.EXPECT().Reconcile(gomock.Any(), gomock.Any(), gomock.Any()).Times(1)
+			providerReconciler.EXPECT().Reconcile(gomock.Any(), gomock.Any(), gomock.Any()).Times(1).Do(
+				func(ctx context.Context, log logr.Logger, cluster *anywherev1.Cluster) {
+					kcpReadyCondition := conditions.Get(kcp, clusterv1.ReadyCondition)
+					if kcpReadyCondition == nil ||
+						(kcpReadyCondition != nil && kcpReadyCondition.Status == "False") {
+						conditions.MarkFalse(cluster, anywherev1.DefaultCNIConfiguredCondition, anywherev1.ControlPlaneNotReadyReason, clusterv1.ConditionSeverityInfo, "")
+						return
+					}
+
+					if tt.skipCNIUpgrade {
+						conditions.MarkFalse(cluster, anywherev1.DefaultCNIConfiguredCondition, anywherev1.SkipUpgradesForDefaultCNIConfiguredReason, clusterv1.ConditionSeverityWarning, "Configured to skip default Cilium CNI upgrades")
+						return
+					}
+
+					conditions.MarkTrue(cluster, anywherev1.DefaultCNIConfiguredCondition)
+				},
+			)
 			mhcReconciler.EXPECT().Reconcile(logCtx, gomock.AssignableToTypeOf(logr.Logger{}), sameName(config.Cluster)).Return(nil)
 
 			r := controllers.NewClusterReconciler(testClient, registry, iam, clusterValidator, mockPkgs, mhcReconciler)
diff --git a/pkg/controller/clusters/status.go b/pkg/controller/clusters/status.go
index af31607cc7ed..9480b5137315 100644
--- a/pkg/controller/clusters/status.go
+++ b/pkg/controller/clusters/status.go
@@ -68,21 +68,6 @@ func UpdateClusterStatusForCNI(ctx context.Context, cluster *anywherev1.Cluster)
 		conditions.MarkFalse(cluster, anywherev1.DefaultCNIConfiguredCondition, anywherev1.ControlPlaneNotReadyReason, clusterv1.ConditionSeverityInfo, "")
 		return
 	}
-
-	// Self managed clusters do not use the CNI reconciler, so this status would never get resolved.
-	// TODO: Remove after self-managed clusters are created with the controller in the CLI
-	if cluster.IsSelfManaged() {
-		ciliumCfg := cluster.Spec.ClusterNetwork.CNIConfig.Cilium
-		// Though it may be installed initially to successfully create the cluster,
-		// if the CNI is configured to skip upgrades, we mark the condition as "False"
-		if ciliumCfg != nil && !ciliumCfg.IsManaged() {
-			conditions.MarkFalse(cluster, anywherev1.DefaultCNIConfiguredCondition, anywherev1.SkipUpgradesForDefaultCNIConfiguredReason, clusterv1.ConditionSeverityWarning, "Configured to skip default Cilium CNI upgrades")
-			return
-		}
-
-		// Otherwise, since the control plane is fully ready we can assume the CNI has been configured.
-		conditions.MarkTrue(cluster, anywherev1.DefaultCNIConfiguredCondition)
-	}
 }
 
 // updateConditionsForEtcdAndControlPlane updates the ControlPlaneReady condition if etcdadm cluster is not ready.
diff --git a/pkg/controller/clusters/status_test.go b/pkg/controller/clusters/status_test.go
index d6b05a7a8921..70ce00c84ab9 100644
--- a/pkg/controller/clusters/status_test.go
+++ b/pkg/controller/clusters/status_test.go
@@ -1045,36 +1045,6 @@ func TestUpdateClusterStatusForCNI(t *testing.T) {
 				Status: "True",
 			},
 		},
-		{
-			name:        "cilium is unmanaged",
-			skipUpgrade: ptr.Bool(true),
-			conditions: []anywherev1.Condition{
-				{
-					Type:   anywherev1.ControlPlaneReadyCondition,
-					Status: "True",
-				},
-			},
-			wantCondition: &anywherev1.Condition{
-				Type:     anywherev1.DefaultCNIConfiguredCondition,
-				Reason:   anywherev1.SkipUpgradesForDefaultCNIConfiguredReason,
-				Status:   "False",
-				Severity: clusterv1.ConditionSeverityWarning,
-			},
-		},
-		{
-			name:        "cilium is managed",
-			skipUpgrade: ptr.Bool(false),
-			conditions: []anywherev1.Condition{
-				{
-					Type:   anywherev1.ControlPlaneReadyCondition,
-					Status: "True",
-				},
-			},
-			wantCondition: &anywherev1.Condition{
-				Type:   anywherev1.DefaultCNIConfiguredCondition,
-				Status: "True",
-			},
-		},
 	}
 
 	for _, tt := range tests {