diff --git a/build_debian.sh b/build_debian.sh
index d79a05275b1..e113e692510 100755
--- a/build_debian.sh
+++ b/build_debian.sh
@@ -240,6 +240,7 @@ iface eth0 inet dhcp
 EOF
 
 sudo cp files/dhcp/rfc3442-classless-routes $FILESYSTEM_ROOT/etc/dhcp/dhclient-exit-hooks.d
+sudo cp files/dhcp/sethostname $FILESYSTEM_ROOT/etc/dhcp/dhclient-exit-hooks.d/
 
 if [ -f sonic_debian_extension.sh ]; then
     ./sonic_debian_extension.sh $FILESYSTEM_ROOT
diff --git a/files/dhcp/sethostname b/files/dhcp/sethostname
new file mode 100644
index 00000000000..81bd458935f
--- /dev/null
+++ b/files/dhcp/sethostname
@@ -0,0 +1,20 @@
+#!/bin/bash
+# This script is to update hostname of the system.
+
+if [ "$reason" != BOUND ] && [ "$reason" != RENEW ] \
+     && [ "$reason" != REBIND ] && [ "$reason" != REBOOT ]
+then
+    exit 0
+fi
+
+current_host_name=`hostname -s`
+
+if [ "$current_host_name" != "$new_host_name" ]
+then
+    echo $new_host_name > /etc/hostname
+    line_to_replace=`grep 127.0.0.1.*$current_host_name /etc/hosts`
+    new_line=`echo $line_to_replace | sed "s/$current_host_name/$new_host_name/"`
+    sed -i "s/$line_to_replace/$new_line/" /etc/hosts
+
+    hostname -F /etc/hostname
+fi