diff --git a/cmake/sysbuild/suit.cmake b/cmake/sysbuild/suit.cmake
index 124d5123a90..5a85788b254 100644
--- a/cmake/sysbuild/suit.cmake
+++ b/cmake/sysbuild/suit.cmake
@@ -261,6 +261,38 @@ function(suit_create_package)
     )
   endforeach()
 
+  # First parse which images should be extracted to which cache partition
+  set(DFU_CACHE_PARTITIONS_USED "")
+  foreach(image ${IMAGES})
+    sysbuild_get(EXTRACT_TO_CACHE IMAGE ${image} VAR CONFIG_SUIT_DFU_CACHE_EXTRACT_IMAGE KCONFIG)
+    if(EXTRACT_TO_CACHE)
+      sysbuild_get(CACHE_PARTITION_NUM IMAGE ${image} VAR CONFIG_SUIT_DFU_CACHE_EXTRACT_IMAGE_PARTITION KCONFIG)
+      list(APPEND DFU_CACHE_PARTITIONS_USED ${CACHE_PARTITION_NUM})
+      list(APPEND SUIT_CACHE_PARTITION_${CACHE_PARTITION_NUM} ${image})
+    endif()
+  endforeach()
+  list(REMOVE_DUPLICATES DFU_CACHE_PARTITIONS_USED)
+
+  # Then create the cache partitions
+  foreach(CACHE_PARTITION_NUM ${DFU_CACHE_PARTITIONS_USED})
+    set(CACHE_CREATE_ARGS "")
+    foreach(image ${SUIT_CACHE_PARTITION_${CACHE_PARTITION_NUM}})
+      sysbuild_get(BINARY_DIR IMAGE ${image} VAR APPLICATION_BINARY_DIR CACHE)
+      sysbuild_get(BINARY_FILE IMAGE ${image} VAR CONFIG_KERNEL_BIN_NAME KCONFIG)
+      sysbuild_get(IMAGE_CACHE_URI IMAGE ${image} VAR CONFIG_SUIT_DFU_CACHE_EXTRACT_IMAGE_URI KCONFIG)
+      list(APPEND CACHE_CREATE_ARGS
+        "--input" "\"${IMAGE_CACHE_URI},${BINARY_DIR}/zephyr/${BINARY_FILE}.bin\""
+      )
+    endforeach()
+    list(APPEND CACHE_CREATE_ARGS "--output-file" "${SUIT_ROOT_DIRECTORY}dfu_cache_partition_${CACHE_PARTITION_NUM}.bin")
+
+    if(SUIT_DFU_CACHE_PARTITION_${CACHE_PARTITION_NUM}_EB_SIZE)
+      list(APPEND CACHE_CREATE_ARGS "--eb-size" "${SUIT_DFU_CACHE_PARTITION_${CACHE_PARTITION_NUM}_EB_SIZE}")
+    endif()
+
+    suit_create_cache_partition("${CACHE_CREATE_ARGS}")
+  endforeach()
+
   suit_get_manifest(${SB_CONFIG_SUIT_ENVELOPE_ROOT_TEMPLATE_FILENAME} INPUT_ROOT_ENVELOPE_JINJA_FILE)
   message(STATUS "Found root manifest template: ${INPUT_ROOT_ENVELOPE_JINJA_FILE}")
 
diff --git a/cmake/sysbuild/suit_utilities.cmake b/cmake/sysbuild/suit_utilities.cmake
index 531915558c6..53d7e38193e 100644
--- a/cmake/sysbuild/suit_utilities.cmake
+++ b/cmake/sysbuild/suit_utilities.cmake
@@ -87,3 +87,13 @@ function(suit_create_envelope input_file output_file create_signature)
     suit_sign_envelope(${output_file} ${output_file})
   endif()
 endfunction()
+
+function(suit_create_cache_partition args)
+  set_property(
+    GLOBAL APPEND PROPERTY SUIT_POST_BUILD_COMMANDS
+    COMMAND ${PYTHON_EXECUTABLE} ${SUIT_GENERATOR_CLI_SCRIPT}
+    cache_create
+    ${args}
+    BYPRODUCTS ${output_file}
+  )
+endfunction()
diff --git a/config/suit/templates/nrf54h20/default/v1/app_envelope.yaml.jinja2 b/config/suit/templates/nrf54h20/default/v1/app_envelope.yaml.jinja2
index 700aa1740bc..a543fd490b4 100644
--- a/config/suit/templates/nrf54h20/default/v1/app_envelope.yaml.jinja2
+++ b/config/suit/templates/nrf54h20/default/v1/app_envelope.yaml.jinja2
@@ -77,7 +77,11 @@ SUIT_Envelope_Tagged:
     suit-install:
     - suit-directive-set-component-index: 1
     - suit-directive-override-parameters:
+{%- if 'CONFIG_SUIT_DFU_CACHE_EXTRACT_IMAGE_URI' in application['config'] and application['config']['CONFIG_SUIT_DFU_CACHE_EXTRACT_IMAGE_URI'] != '' %}
+        suit-parameter-uri: '{{ application['config']['CONFIG_SUIT_DFU_CACHE_EXTRACT_IMAGE_URI'] }}'
+{%- else %}
         suit-parameter-uri: '#{{ application['name'] }}'
+{%- endif %}
         suit-parameter-image-digest:
           suit-digest-algorithm-id: cose-alg-sha-256
           suit-digest-bytes:
@@ -125,7 +129,11 @@ SUIT_Envelope_Tagged:
     suit-candidate-verification:
     - suit-directive-set-component-index: 1
     - suit-directive-override-parameters:
+{%- if 'CONFIG_SUIT_DFU_CACHE_EXTRACT_IMAGE_URI' in application['config'] and application['config']['CONFIG_SUIT_DFU_CACHE_EXTRACT_IMAGE_URI'] != '' %}
+        suit-parameter-uri: '{{ application['config']['CONFIG_SUIT_DFU_CACHE_EXTRACT_IMAGE_URI'] }}'
+{%- else %}
         suit-parameter-uri: '#{{ application['name'] }}'
+{%- endif %}
         suit-parameter-image-digest:
           suit-digest-algorithm-id: cose-alg-sha-256
           suit-digest-bytes:
@@ -158,5 +166,7 @@ SUIT_Envelope_Tagged:
         suit-text-model-info: The nRF54H20 application core
         suit-text-component-description: Sample application core FW
         suit-text-component-version: v1.0.0
+{%- if 'CONFIG_SUIT_DFU_CACHE_EXTRACT_IMAGE' not in application['config'] or application['config']['CONFIG_SUIT_DFU_CACHE_EXTRACT_IMAGE'] == '' %}
   suit-integrated-payloads:
     '#{{ application['name'] }}': {{ application['binary'] }}
+{%- endif %}
diff --git a/config/suit/templates/nrf54h20/default/v1/rad_envelope.yaml.jinja2 b/config/suit/templates/nrf54h20/default/v1/rad_envelope.yaml.jinja2
index 026cd632f3f..63f88053a61 100644
--- a/config/suit/templates/nrf54h20/default/v1/rad_envelope.yaml.jinja2
+++ b/config/suit/templates/nrf54h20/default/v1/rad_envelope.yaml.jinja2
@@ -82,7 +82,11 @@ SUIT_Envelope_Tagged:
     suit-install:
     - suit-directive-set-component-index: 1
     - suit-directive-override-parameters:
+{%- if 'CONFIG_SUIT_DFU_CACHE_EXTRACT_IMAGE_URI' in radio['config'] and radio['config']['CONFIG_SUIT_DFU_CACHE_EXTRACT_IMAGE_URI'] != '' %}
+        suit-parameter-uri: '{{ radio['config']['CONFIG_SUIT_DFU_CACHE_EXTRACT_IMAGE_URI'] }}'
+{%- else %}
         suit-parameter-uri: '#{{ radio['name'] }}'
+{%- endif %}
         suit-parameter-image-digest:
           suit-digest-algorithm-id: cose-alg-sha-256
           suit-digest-bytes:
@@ -130,7 +134,11 @@ SUIT_Envelope_Tagged:
     suit-candidate-verification:
     - suit-directive-set-component-index: 1
     - suit-directive-override-parameters:
+{%- if 'CONFIG_SUIT_DFU_CACHE_EXTRACT_IMAGE_URI' in radio['config'] and radio['config']['CONFIG_SUIT_DFU_CACHE_EXTRACT_IMAGE_URI'] != '' %}
+        suit-parameter-uri: '{{ radio['config']['CONFIG_SUIT_DFU_CACHE_EXTRACT_IMAGE_URI'] }}'
+{%- else %}
         suit-parameter-uri: '#{{ radio['name'] }}'
+{%- endif %}
         suit-parameter-image-digest:
           suit-digest-algorithm-id: cose-alg-sha-256
           suit-digest-bytes:
@@ -163,5 +171,8 @@ SUIT_Envelope_Tagged:
         suit-text-model-info: The nRF54H20 radio core
         suit-text-component-description: Sample radio core FW
         suit-text-component-version: v1.0.0
+
+{%- if 'CONFIG_SUIT_DFU_CACHE_EXTRACT_IMAGE' not in radio['config'] or radio['config']['CONFIG_SUIT_DFU_CACHE_EXTRACT_IMAGE'] == '' %}
   suit-integrated-payloads:
     '#{{ radio['name'] }}': {{ radio['binary'] }}
+{%- endif %}
diff --git a/config/suit/templates/nrf54h20/matter/v1/app_envelope.yaml.jinja2 b/config/suit/templates/nrf54h20/matter/v1/app_envelope.yaml.jinja2
index 941da9fd28f..c9e3a09c4ac 100644
--- a/config/suit/templates/nrf54h20/matter/v1/app_envelope.yaml.jinja2
+++ b/config/suit/templates/nrf54h20/matter/v1/app_envelope.yaml.jinja2
@@ -115,7 +115,11 @@ SUIT_Envelope_Tagged:
 {%- endif %}
     - suit-directive-set-component-index: 1
     - suit-directive-override-parameters:
+{%- if 'CONFIG_SUIT_DFU_CACHE_EXTRACT_IMAGE_URI' in application['config'] and application['config']['CONFIG_SUIT_DFU_CACHE_EXTRACT_IMAGE_URI'] != '' %}
+        suit-parameter-uri: '{{ application['config']['CONFIG_SUIT_DFU_CACHE_EXTRACT_IMAGE_URI'] }}'
+{%- else %}
         suit-parameter-uri: '#{{ application['name'] }}'
+{%- endif %}
         suit-parameter-image-digest:
           suit-digest-algorithm-id: cose-alg-sha-256
           suit-digest-bytes:
@@ -154,7 +158,9 @@ SUIT_Envelope_Tagged:
         suit-text-component-description: Sample application core FW
         suit-text-component-version: v1.0.0
   suit-integrated-payloads:
+{%- if 'CONFIG_SUIT_DFU_CACHE_EXTRACT_IMAGE' not in application['config'] or application['config']['CONFIG_SUIT_DFU_CACHE_EXTRACT_IMAGE'] == '' %}
     '#{{ application['name'] }}': {{ application['binary'] }}
+{%- endif %}
 {%- if flash_companion is defined %}
     '#{{ flash_companion['name'] }}': {{ flash_companion['binary'] }}
 {%- endif %}
diff --git a/config/suit/templates/nrf54h20/matter/v1/rad_envelope.yaml.jinja2 b/config/suit/templates/nrf54h20/matter/v1/rad_envelope.yaml.jinja2
index 58a7777d4df..25cedfa872d 100644
--- a/config/suit/templates/nrf54h20/matter/v1/rad_envelope.yaml.jinja2
+++ b/config/suit/templates/nrf54h20/matter/v1/rad_envelope.yaml.jinja2
@@ -78,7 +78,11 @@ SUIT_Envelope_Tagged:
     suit-install:
     - suit-directive-set-component-index: 1
     - suit-directive-override-parameters:
+{%- if 'CONFIG_SUIT_DFU_CACHE_EXTRACT_IMAGE_URI' in radio['config'] and radio['config']['CONFIG_SUIT_DFU_CACHE_EXTRACT_IMAGE_URI'] != '' %}
+        suit-parameter-uri: '{{ radio['config']['CONFIG_SUIT_DFU_CACHE_EXTRACT_IMAGE_URI'] }}'
+{%- else %}
         suit-parameter-uri: '#{{ radio['name'] }}'
+{%- endif %}
     - suit-directive-fetch:
       - suit-send-record-failure
     - suit-condition-image-match:
@@ -112,5 +116,7 @@ SUIT_Envelope_Tagged:
         suit-text-model-info: The nRF54H20 radio core
         suit-text-component-description: Sample radio core FW
         suit-text-component-version: v1.0.0
+{%- if 'CONFIG_SUIT_DFU_CACHE_EXTRACT_IMAGE' not in radio['config'] or radio['config']['CONFIG_SUIT_DFU_CACHE_EXTRACT_IMAGE'] == '' %}
   suit-integrated-payloads:
     '#{{ radio['name'] }}': {{ radio['binary'] }}
+{%- endif %}
diff --git a/samples/suit/smp_transfer/sample.yaml b/samples/suit/smp_transfer/sample.yaml
index 34fc5c59bbd..e05b216343c 100644
--- a/samples/suit/smp_transfer/sample.yaml
+++ b/samples/suit/smp_transfer/sample.yaml
@@ -52,3 +52,22 @@ tests:
       - OVERLAY_CONFIG="sysbuild/smp_transfer_bt.conf"
       - SB_OVERLAY_CONFIG="sysbuild_bt.conf"
     tags: suit bluetooth ci_samples_suit
+
+  sample.suit.smp_transfer.full.extflash.extracted_cache:
+    extra_args:
+      - FILE_SUFFIX=extflash
+      - SUIT_DFU_CACHE_PARTITION_1_EB_SIZE=4096
+    extra_configs:
+      - CONFIG_SUIT_DFU_CACHE_EXTRACT_IMAGE=y
+    tags: suit ci_samples_suit
+
+  sample.suit.smp_transfer.full.extflash.bt.extracted_cache:
+    extra_args:
+      - FILE_SUFFIX=extflash
+      - OVERLAY_CONFIG="sysbuild/smp_transfer_bt.conf"
+      - SB_OVERLAY_CONFIG="sysbuild_bt.conf"
+      - SUIT_DFU_CACHE_PARTITION_1_EB_SIZE=4096
+      - hci_ipc_CONFIG_SUIT_DFU_CACHE_EXTRACT_IMAGE=y
+    extra_configs:
+      - CONFIG_SUIT_DFU_CACHE_EXTRACT_IMAGE=y
+    tags: suit bluetooth ci_samples_suit
diff --git a/samples/suit/smp_transfer/suit/nrf54h20/app_envelope_extflash.yaml.jinja2 b/samples/suit/smp_transfer/suit/nrf54h20/app_envelope_extflash.yaml.jinja2
index 5b5ebc196ee..c699ebe37a7 100644
--- a/samples/suit/smp_transfer/suit/nrf54h20/app_envelope_extflash.yaml.jinja2
+++ b/samples/suit/smp_transfer/suit/nrf54h20/app_envelope_extflash.yaml.jinja2
@@ -86,12 +86,14 @@ SUIT_Envelope_Tagged:
     suit-current-version: {{ DEFAULT_VERSION }}
 {%- endif %}
 
+{%- if 'CONFIG_SUIT_DFU_CACHE_EXTRACT_IMAGE' not in application['config'] or application['config']['CONFIG_SUIT_DFU_CACHE_EXTRACT_IMAGE'] == '' %}
     suit-payload-fetch:
     - suit-directive-set-component-index: 2
     - suit-directive-override-parameters:
         suit-parameter-uri: 'file://{{ application['filename'] }}'
     - suit-directive-fetch:
       - suit-send-record-failure
+{%- endif %}
     suit-install:
 {%- if flash_companion is defined %}
     - suit-directive-set-component-index: 1
@@ -123,7 +125,11 @@ SUIT_Envelope_Tagged:
 {%- endif %}
     - suit-directive-set-component-index: 1
     - suit-directive-override-parameters:
+{%- if 'CONFIG_SUIT_DFU_CACHE_EXTRACT_IMAGE_URI' in application['config'] and application['config']['CONFIG_SUIT_DFU_CACHE_EXTRACT_IMAGE_URI'] != '' %}
+        suit-parameter-uri: '{{ application['config']['CONFIG_SUIT_DFU_CACHE_EXTRACT_IMAGE_URI'] }}'
+{%- else %}
         suit-parameter-uri: 'file://{{ application['filename'] }}'
+{%- endif %}
         suit-parameter-image-digest:
           suit-digest-algorithm-id: cose-alg-sha-256
           suit-digest-bytes:
diff --git a/samples/suit/smp_transfer/suit/nrf54h20/rad_envelope_extflash.yaml.jinja2 b/samples/suit/smp_transfer/suit/nrf54h20/rad_envelope_extflash.yaml.jinja2
index 29b34a4e87b..e8c9374b976 100644
--- a/samples/suit/smp_transfer/suit/nrf54h20/rad_envelope_extflash.yaml.jinja2
+++ b/samples/suit/smp_transfer/suit/nrf54h20/rad_envelope_extflash.yaml.jinja2
@@ -77,16 +77,22 @@ SUIT_Envelope_Tagged:
     suit-current-version: {{ DEFAULT_VERSION }}
 {%- endif %}
 
+{%- if 'CONFIG_SUIT_DFU_CACHE_EXTRACT_IMAGE' not in radio['config'] or radio['config']['CONFIG_SUIT_DFU_CACHE_EXTRACT_IMAGE'] == '' %}
     suit-payload-fetch:
     - suit-directive-set-component-index: 2
     - suit-directive-override-parameters:
         suit-parameter-uri: 'file://{{ radio['filename'] }}'
     - suit-directive-fetch:
       - suit-send-record-failure
+{%- endif %}
     suit-install:
     - suit-directive-set-component-index: 1
     - suit-directive-override-parameters:
+{%- if 'CONFIG_SUIT_DFU_CACHE_EXTRACT_IMAGE_URI' in radio['config'] and radio['config']['CONFIG_SUIT_DFU_CACHE_EXTRACT_IMAGE_URI'] != '' %}
+        suit-parameter-uri: '{{ radio['config']['CONFIG_SUIT_DFU_CACHE_EXTRACT_IMAGE_URI'] }}'
+{%- else %}
         suit-parameter-uri: 'file://{{ radio['filename'] }}'
+{%- endif %}
     - suit-directive-fetch:
       - suit-send-record-failure
     - suit-condition-image-match:
diff --git a/west.yml b/west.yml
index f0ae88f7f91..c22b8d0b8ef 100644
--- a/west.yml
+++ b/west.yml
@@ -254,7 +254,7 @@ manifest:
           upstream-sha: c6eaeda5a1c1c5dbb24dce7e027340cb8893a77b
           compare-by-default: false
     - name: suit-generator
-      revision: 97ef5bdd41716aa7fa21a0f0c149a66d1f91ab8d
+      revision: 4372d27e940798cb596d18d90affa9d62d9d2564
       path: modules/lib/suit-generator
     - name: suit-processor
       revision: ee58d543994256d545c692e14badf3efa9830237