diff --git a/images/miq-app/docker-assets/appliance-initialize.sh b/images/miq-app/docker-assets/appliance-initialize.sh
index 9c81d162..068840f6 100755
--- a/images/miq-app/docker-assets/appliance-initialize.sh
+++ b/images/miq-app/docker-assets/appliance-initialize.sh
@@ -14,8 +14,6 @@ prepare_init_env
 # Check Memcached readiness
 check_svc_status ${MEMCACHED_SERVICE_NAME} 11211
 
-setup_memcached
-
 # Check DB readiness
 check_svc_status ${DATABASE_SERVICE_NAME} 5432
 
diff --git a/images/miq-app/docker-assets/container-scripts/container-deploy-common.sh b/images/miq-app/docker-assets/container-scripts/container-deploy-common.sh
index a71bee4c..7138308f 100644
--- a/images/miq-app/docker-assets/container-scripts/container-deploy-common.sh
+++ b/images/miq-app/docker-assets/container-scripts/container-deploy-common.sh
@@ -205,15 +205,6 @@ function init_appliance() {
   [ "$?" -ne "0" ] && echo "ERROR: Failed to initialize appliance, please check journal or appliance_console logs at ${APP_ROOT}/log/appliance_console.log" && exit 1
 }
 
-# Replace memcached host in EVM configuration to use assigned service pod IP
-function setup_memcached() {
-  echo "== Applying memcached config =="
-
-  sed -i~ -E "s/:memcache_server:.*/:memcache_server: ${MEMCACHED_SERVICE_NAME}:11211/gi" "${APP_ROOT}/config/settings.yml"
-
-  [ "$?" -eq "0" ] && return 0 || echo "ERROR: Failed to apply memcached configuration, please check journal or PV logs" && exit 1
-}
-
 # Run hook script to enable future code to be run anywhere needed (i.e upgrades)
 function run_hook() {
   echo "== Calling Deployment Hook =="
diff --git a/templates/miq-template-ext-db.yaml b/templates/miq-template-ext-db.yaml
index 5f7b8927..a9a82b5c 100644
--- a/templates/miq-template-ext-db.yaml
+++ b/templates/miq-template-ext-db.yaml
@@ -135,6 +135,9 @@ objects:
                 secretKeyRef:
                   name: "${NAME}-secrets"
                   key: "database-url"
+            -
+              name: "MEMCACHED_SERVER"
+              value: "${MEMCACHED_SERVICE_NAME}:11211"
             -
               name: "MEMCACHED_SERVICE_NAME"
               value: "${MEMCACHED_SERVICE_NAME}"
diff --git a/templates/miq-template.yaml b/templates/miq-template.yaml
index 50a52f22..706e37a4 100644
--- a/templates/miq-template.yaml
+++ b/templates/miq-template.yaml
@@ -156,6 +156,9 @@ objects:
                 secretKeyRef:
                   name: "${NAME}-secrets"
                   key: "database-url"
+            -
+              name: "MEMCACHED_SERVER"
+              value: "${MEMCACHED_SERVICE_NAME}:11211"
             -
               name: "MEMCACHED_SERVICE_NAME"
               value: "${MEMCACHED_SERVICE_NAME}"