diff --git a/buildroot-external/package/hassio/create-data-partition.sh b/buildroot-external/package/hassio/create-data-partition.sh
index e24ef9cf2..8c8ee8073 100755
--- a/buildroot-external/package/hassio/create-data-partition.sh
+++ b/buildroot-external/package/hassio/create-data-partition.sh
@@ -23,11 +23,14 @@ container=$(docker run --privileged -e DOCKER_TLS_CERTDIR="" \
 	-v "${build_dir}/data/":/data \
 	-v "${build_dir}/data/docker/":/var/lib/docker \
 	-v "${build_dir}":/build \
-	-d "docker:${docker_version}-dind" --storage-driver overlay2)
+	-d "docker:${docker_version}-dind" --feature containerd-snapshotter)
 
 docker exec "${container}" sh /build/dind-import-containers.sh "${channel}"
 
 docker stop "${container}"
 
+# Indicator for docker-prepare.service to use the containerd snapshotter
+sudo touch "${build_dir}/data/.docker-use-containerd-snapshotter"
+
 # Unmount data image
 sudo umount "${build_dir}/data/"
diff --git a/buildroot-external/rootfs-overlay/etc/docker/daemon.json b/buildroot-external/rootfs-overlay/etc/docker/daemon.json
index 5a19d56de..4d0f7c752 100644
--- a/buildroot-external/rootfs-overlay/etc/docker/daemon.json
+++ b/buildroot-external/rootfs-overlay/etc/docker/daemon.json
@@ -1,5 +1,4 @@
 {
-    "storage-driver": "overlay2",
     "log-driver": "journald",
     "log-opts": {
         "tag": "{{.Name}}"
diff --git a/buildroot-external/rootfs-overlay/usr/lib/systemd/system/docker-prepare.service b/buildroot-external/rootfs-overlay/usr/lib/systemd/system/docker-prepare.service
new file mode 100644
index 000000000..5457ff0d0
--- /dev/null
+++ b/buildroot-external/rootfs-overlay/usr/lib/systemd/system/docker-prepare.service
@@ -0,0 +1,11 @@
+[Unit]
+Description=Docker environment and config initialization
+Before=docker.service
+RequiresMountsFor=/mnt/data
+
+[Service]
+Type=oneshot
+ExecStart=/usr/libexec/docker-prepare
+
+[Install]
+WantedBy=multi-user.target
diff --git a/buildroot-external/rootfs-overlay/usr/lib/systemd/system/docker.service.d/hassos.conf b/buildroot-external/rootfs-overlay/usr/lib/systemd/system/docker.service.d/hassos.conf
index 4e6014da7..92380f429 100644
--- a/buildroot-external/rootfs-overlay/usr/lib/systemd/system/docker.service.d/hassos.conf
+++ b/buildroot-external/rootfs-overlay/usr/lib/systemd/system/docker.service.d/hassos.conf
@@ -2,4 +2,8 @@
 RequiresMountsFor=/etc/docker /mnt/data /var/lib/docker
 
 [Service]
+# env file must be created by docker-prepare.service
+EnvironmentFile=/run/dockerd.env
+ExecStart=
+ExecStart=/usr/bin/dockerd -H fd:// --containerd=/run/containerd/containerd.sock $DOCKERD_FLAGS
 OOMScoreAdjust=-400
diff --git a/buildroot-external/rootfs-overlay/usr/libexec/docker-prepare b/buildroot-external/rootfs-overlay/usr/libexec/docker-prepare
new file mode 100755
index 000000000..bc6f4d2fb
--- /dev/null
+++ b/buildroot-external/rootfs-overlay/usr/libexec/docker-prepare
@@ -0,0 +1,23 @@
+#!/bin/sh
+
+set -e
+
+if [ ! -d /mnt/data/docker ] || [ -z "$(ls -A /mnt/data/docker)" ]; then
+    echo "[INFO] Docker data is wiped, creating containerd snapshotter flag"
+    touch /mnt/data/.docker-use-containerd-snapshotter
+fi
+
+DOCKERD_FLAGS=""
+
+if [ -f /mnt/data/.docker-use-containerd-snapshotter ]; then
+    echo "[INFO] Using Docker containerd snapshotter"
+    DOCKERD_FLAGS="${DOCKERD_FLAGS} --feature containerd-snapshotter"
+
+    if [ -d /mnt/data/docker/overlay2 ]; then
+        echo "[INFO] Removing no longer used overlay2 directory"
+        # Allow the removal to fail without failing the service
+        rm -rf /mnt/data/docker/overlay2 || true
+    fi
+fi
+
+echo "DOCKERD_FLAGS=\"${DOCKERD_FLAGS}\"" > /run/dockerd.env