diff --git a/internal/models/akscluster/network_config.go b/internal/models/akscluster/network_config.go
index d32382d8e..22b96e5da 100644
--- a/internal/models/akscluster/network_config.go
+++ b/internal/models/akscluster/network_config.go
@@ -17,6 +17,12 @@ const (
 
 	// VmwareTanzuManageV1alpha1AksClusterNetworkPluginModeOverlay captures value "overlay".
 	VmwareTanzuManageV1alpha1AksClusterNetworkPluginModeOverlay = "overlay"
+
+	// VmwareTanzuManageV1alpha1AksClusterNetworkDataplaneCilium captures value "cilium".
+	VmwareTanzuManageV1alpha1AksClusterNetworkDataplaneCilium = "cilium"
+
+	// VmwareTanzuManageV1alpha1AksClusterNetworkDataplaneAzure captures value "azure".
+	VmwareTanzuManageV1alpha1AksClusterNetworkDataplaneAzure = "azure"
 )
 
 // VmwareTanzuManageV1alpha1AksclusterNetworkConfig The network configuration for the AKS cluster.
@@ -52,6 +58,9 @@ type VmwareTanzuManageV1alpha1AksclusterNetworkConfig struct {
 
 	// The CIDR notation IP ranges from which to assign service cluster IPs.
 	ServiceCidrs []string `json:"serviceCidrs"`
+
+	// Network dataplane used in the Kubernetes cluster. The valid value is azure and cilium.
+	NetworkDataplane string `json:"networkDataplane,omitempty"`
 }
 
 // MarshalBinary interface implementation.
diff --git a/internal/resources/akscluster/akscluster_mapper.go b/internal/resources/akscluster/akscluster_mapper.go
index 6e9f4bbb6..47ad2f794 100644
--- a/internal/resources/akscluster/akscluster_mapper.go
+++ b/internal/resources/akscluster/akscluster_mapper.go
@@ -279,6 +279,10 @@ func constructNetworkConfig(data []any) *models.VmwareTanzuManageV1alpha1Aksclus
 		networkConfig.PodCidrs = helper.SetPrimitiveList[string](v.([]any), podCidrKey)
 	}
 
+	if v, ok := networkConfigData[networkDataplaneKey]; ok {
+		helper.SetPrimitiveValue(v, &networkConfig.NetworkDataplane, networkDataplaneKey)
+	}
+
 	return networkConfig
 }
 
@@ -608,6 +612,7 @@ func toNetworkConfigMap(config *models.VmwareTanzuManageV1alpha1AksclusterNetwor
 	data[dockerBridgeCidrKey] = config.DockerBridgeCidr
 	data[podCidrKey] = toInterfaceArray(config.PodCidrs)
 	data[serviceCidrKey] = toInterfaceArray(config.ServiceCidrs)
+	data[networkDataplaneKey] = config.NetworkDataplane
 
 	return []any{data}
 }
diff --git a/internal/resources/akscluster/constants.go b/internal/resources/akscluster/constants.go
index 7b5fb5695..08776c322 100644
--- a/internal/resources/akscluster/constants.go
+++ b/internal/resources/akscluster/constants.go
@@ -53,6 +53,7 @@ const (
 	loadBalancerSkuKey                         = "load_balancer_sku"
 	networkPluginKey                           = "network_plugin"
 	networkPluginModeKey                       = "network_plugin_mode"
+	networkDataplaneKey                        = "network_dataplane"
 	networkPolicyKey                           = "network_policy"
 	dnsServiceIPKey                            = "dns_service_ip"
 	dockerBridgeCidrKey                        = "docker_bridge_cidr"
diff --git a/internal/resources/akscluster/helpers_test.go b/internal/resources/akscluster/helpers_test.go
index e27efeaba..7b8f1b5ee 100644
--- a/internal/resources/akscluster/helpers_test.go
+++ b/internal/resources/akscluster/helpers_test.go
@@ -354,6 +354,7 @@ func aTestClusterDataMap(w ...mapWither) map[string]any {
 					"pod_cidr":            nil,
 					"service_cidr":        []any{"127.0.0.4"},
 					"dns_prefix":          "net-prefix",
+					"network_dataplane":   "",
 				}},
 				"storage_config": []any{map[string]any{
 					"enable_disk_csi_driver":     true,
diff --git a/internal/resources/akscluster/resource_akscluster_acc_test.go b/internal/resources/akscluster/resource_akscluster_acc_test.go
index 3dc203bce..439f61817 100644
--- a/internal/resources/akscluster/resource_akscluster_acc_test.go
+++ b/internal/resources/akscluster/resource_akscluster_acc_test.go
@@ -37,7 +37,7 @@ import (
 )
 
 // Version of Kubernetes to deploy during acceptance tests.
-var aksKubernetesVersion = "1.27.9"
+var aksKubernetesVersion = "1.28.0"
 
 func validateSetup(t *testing.T) {
 	// Check if the required environment variables are set
@@ -414,6 +414,9 @@ func testAKSCluster(fn *aksmodel.VmwareTanzuManageV1alpha1AksclusterFullName) st
         count = 1
         mode = "SYSTEM"
         vm_size = "Standard_DS2_v2"
+        upgrade_config {
+          max_surge = "10%%"
+        }
       }
     }
   }
@@ -448,6 +451,9 @@ func testAKSClusterEnableCSI(fn *aksmodel.VmwareTanzuManageV1alpha1AksclusterFul
         count = 1
         mode = "SYSTEM"
         vm_size = "Standard_DS2_v2"
+        upgrade_config {
+          max_surge = "10%%"
+        }
       }
     }
   }
@@ -482,6 +488,9 @@ func testAKSClusterAddUserNodepool(fn *aksmodel.VmwareTanzuManageV1alpha1Aksclus
         count = 1
         mode = "SYSTEM"
         vm_size = "Standard_DS2_v2"
+        upgrade_config {
+          max_surge = "10%%"
+        }
       }
     }
     nodepool {
@@ -490,6 +499,9 @@ func testAKSClusterAddUserNodepool(fn *aksmodel.VmwareTanzuManageV1alpha1Aksclus
         count = 1
         mode = "USER"
         vm_size = "Standard_DS2_v2"
+        upgrade_config {
+          max_surge = "10%%"
+        }
       }
     }
   }
@@ -545,7 +557,10 @@ func mockNodepool(w ...nodepoolWither) *aksmodel.VmwareTanzuManageV1alpha1Aksclu
 			Mode:   aksmodel.VmwareTanzuManageV1alpha1AksclusterNodepoolModeSYSTEM.Pointer(),
 			OsType: aksmodel.VmwareTanzuManageV1alpha1AksclusterNodepoolOsTypeLINUX.Pointer(),
 			VMSize: "Standard_DS2_v2",
-			Type:   aksmodel.VmwareTanzuManageV1alpha1AksclusterNodepoolTypeVIRTUALMACHINESCALESETS.Pointer(),
+			UpgradeConfig: &aksmodel.VmwareTanzuManageV1alpha1AksclusterNodepoolUpgradeConfig{
+				MaxSurge: "10%",
+			},
+			Type: aksmodel.VmwareTanzuManageV1alpha1AksclusterNodepoolTypeVIRTUALMACHINESCALESETS.Pointer(),
 		},
 		Status: &aksmodel.VmwareTanzuManageV1alpha1AksclusterNodepoolStatus{
 			Phase: aksmodel.VmwareTanzuManageV1alpha1AksclusterNodepoolPhaseREADY.Pointer(),
diff --git a/internal/resources/akscluster/schema.go b/internal/resources/akscluster/schema.go
index def40c8f6..868f993cd 100644
--- a/internal/resources/akscluster/schema.go
+++ b/internal/resources/akscluster/schema.go
@@ -400,6 +400,17 @@ var NetworkConfig = &schema.Resource{
 			ForceNew:    true,
 			Required:    true,
 		},
+		networkDataplaneKey: {
+			Type:        schema.TypeString,
+			Description: "Network dataplane used in the Kubernetes cluster. The valid value is azure and cilium.",
+			ForceNew:    true,
+			Optional:    true,
+			Computed:    true,
+			ValidateDiagFunc: validation.ToDiagFunc(validation.StringInSlice([]string{"",
+				aksmodel.VmwareTanzuManageV1alpha1AksClusterNetworkDataplaneCilium,
+				aksmodel.VmwareTanzuManageV1alpha1AksClusterNetworkDataplaneAzure,
+			}, false)),
+		},
 	},
 }