diff --git a/handlers/main.yml b/handlers/main.yml
index 1b2480a..a9187c6 100644
--- a/handlers/main.yml
+++ b/handlers/main.yml
@@ -20,3 +20,12 @@
   when: inventory_hostname in groups[item.group]
   listen:
     - "venv changed"
+
+# NOTE (noonedeadpunk): Remove this task after Xena release
+- name: Remove obsoleted policy.json
+  file:
+    path: "/etc/sahara/policy.json"
+    state: absent
+  listen:
+    - "Restart sahara services"
+    - "venv changed"
\ No newline at end of file
diff --git a/tasks/sahara_post_install.yml b/tasks/sahara_post_install.yml
index 04f7155..6a9e5b0 100644
--- a/tasks/sahara_post_install.yml
+++ b/tasks/sahara_post_install.yml
@@ -35,14 +35,32 @@
       group: "root"
       config_overrides: "{{ sahara_rootwrap_conf_overrides }}"
       config_type: "ini"
-    - src: "policy.json.j2"
-      dest: "/etc/sahara/policy.json"
-      config_overrides: "{{ sahara_policy_overrides }}"
-      config_type: "json"
   notify:
     - Restart sahara services
     - Restart uwsgi services
 
+- name: Implement policy.yaml if there are overrides configured
+  config_template:
+    content: "{{ sahara_policy_overrides }}"
+    dest: "/etc/sahara/policy.yaml"
+    owner: "{{ sahara_system_user_name }}"
+    group: "{{ sahara_system_group_name }}"
+    mode: "0644"
+    config_type: yaml
+  when:
+    - sahara_policy_overrides | length > 0
+  tags:
+    - sahara-policy-override
+
+- name: Remove legacy policy.yaml file
+  file:
+    path: "/etc/sahara/policy.yaml"
+    state: absent
+  when:
+    - sahara_policy_overrides | length == 0
+  tags:
+    - sahara-policy-override
+
 - name: Drop rootwrap filter(s)
   copy:
     src: "{{ item }}"
diff --git a/templates/policy.json.j2 b/templates/policy.json.j2
deleted file mode 100644
index 57baaad..0000000
--- a/templates/policy.json.j2
+++ /dev/null
@@ -1,74 +0,0 @@
-{
-    "context_is_admin": "role:admin",
-    "default": "",
-
-    "data-processing:clusters:get_all": "",
-    "data-processing:clusters:create": "",
-    "data-processing:clusters:scale": "",
-    "data-processing:clusters:get": "",
-    "data-processing:clusters:delete": "",
-    "data-processing:clusters:modify": "",
-
-    "data-processing:cluster-templates:get_all": "",
-    "data-processing:cluster-templates:create": "",
-    "data-processing:cluster-templates:get": "",
-    "data-processing:cluster-templates:modify": "",
-    "data-processing:cluster-templates:delete": "",
-
-    "data-processing:node-group-templates:get_all": "",
-    "data-processing:node-group-templates:create": "",
-    "data-processing:node-group-templates:get": "",
-    "data-processing:node-group-templates:modify": "",
-    "data-processing:node-group-templates:delete": "",
-
-    "data-processing:plugins:get_all": "",
-    "data-processing:plugins:get": "",
-    "data-processing:plugins:get_version": "",
-    "data-processing:plugins:convert_config": "",
-    "data-processing:plugins:patch": "role:admin",
-
-    "data-processing:images:get_all": "",
-    "data-processing:images:get": "",
-    "data-processing:images:register": "",
-    "data-processing:images:unregister": "",
-    "data-processing:images:add_tags": "",
-    "data-processing:images:set_tags": "",
-    "data-processing:images:remove_tags": "",
-
-    "data-processing:job-executions:get_all": "",
-    "data-processing:job-executions:get": "",
-    "data-processing:job-executions:refresh_status": "",
-    "data-processing:job-executions:cancel": "",
-    "data-processing:job-executions:delete": "",
-    "data-processing:job-executions:modify": "",
-
-    "data-processing:data-sources:get_all": "",
-    "data-processing:data-sources:get": "",
-    "data-processing:data-sources:register": "",
-    "data-processing:data-sources:delete": "",
-    "data-processing:data-sources:modify": "",
-
-    "data-processing:jobs:get_all": "",
-    "data-processing:jobs:create": "",
-    "data-processing:jobs:get": "",
-    "data-processing:jobs:delete": "",
-    "data-processing:jobs:get_config_hints": "",
-    "data-processing:jobs:execute": "",
-    "data-processing:jobs:modify": "",
-
-    "data-processing:job-binaries:get_all": "",
-    "data-processing:job-binaries:create": "",
-    "data-processing:job-binaries:get": "",
-    "data-processing:job-binaries:delete": "",
-    "data-processing:job-binaries:get_data": "",
-    "data-processing:job-binaries:modify": "",
-
-    "data-processing:job-binary-internals:get_all": "",
-    "data-processing:job-binary-internals:create": "",
-    "data-processing:job-binary-internals:get": "",
-    "data-processing:job-binary-internals:delete": "",
-    "data-processing:job-binary-internals:get_data": "",
-    "data-processing:job-binary-internals:modify": "",
-
-    "data-processing:job-types:get_all": ""
-}