diff --git a/apps/openstacknetworking/switching/src/main/java/org/onosproject/openstacknetworking/switching/OpenstackSwitchingRulePopulator.java b/apps/openstacknetworking/switching/src/main/java/org/onosproject/openstacknetworking/switching/OpenstackSwitchingRulePopulator.java
new file mode 100644
index 0000000..732be7d
--- /dev/null
+++ b/apps/openstacknetworking/switching/src/main/java/org/onosproject/openstacknetworking/switching/OpenstackSwitchingRulePopulator.java
@@ -0,0 +1,293 @@
+/*
+* Copyright 2016-present Open Networking Laboratory
+*
+* Licensed under the Apache License, Version 2.0 (the "License");
+* you may not use this file except in compliance with the License.
+* You may obtain a copy of the License at
+*
+*     http://www.apache.org/licenses/LICENSE-2.0
+*
+* Unless required by applicable law or agreed to in writing, software
+* distributed under the License is distributed on an "AS IS" BASIS,
+* WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+* See the License for the specific language governing permissions and
+* limitations under the License.
+*/
+
+package org.onosproject.openstacknetworking.switching;
+
+import org.apache.felix.scr.annotations.Activate;
+import org.apache.felix.scr.annotations.Component;
+import org.apache.felix.scr.annotations.Deactivate;
+import org.apache.felix.scr.annotations.Reference;
+import org.apache.felix.scr.annotations.ReferenceCardinality;
+import org.onlab.packet.Ethernet;
+import org.onlab.packet.Ip4Address;
+import org.onlab.packet.IpAddress;
+import org.onosproject.net.Device;
+import org.onosproject.net.DeviceId;
+import org.onosproject.net.Host;
+import org.onosproject.net.PortNumber;
+import org.onosproject.net.behaviour.ExtensionTreatmentResolver;
+import org.onosproject.net.device.DeviceService;
+import org.onosproject.net.flow.DefaultTrafficSelector;
+import org.onosproject.net.flow.DefaultTrafficTreatment;
+import org.onosproject.net.flow.TrafficSelector;
+import org.onosproject.net.flow.TrafficTreatment;
+import org.onosproject.net.flow.instructions.ExtensionTreatment;
+import org.onosproject.net.flow.instructions.ExtensionPropertyException;
+import org.onosproject.net.flowobjective.DefaultForwardingObjective;
+import org.onosproject.net.flowobjective.FlowObjectiveService;
+import org.onosproject.net.flowobjective.ForwardingObjective;
+import org.onosproject.openstacknode.OpenstackNodeService;
+import org.slf4j.Logger;
+import org.slf4j.LoggerFactory;
+
+import java.util.Objects;
+import java.util.Optional;
+
+import static org.onosproject.net.flow.instructions.ExtensionTreatmentType.ExtensionTreatmentTypes.NICIRA_SET_TUNNEL_DST;
+import static org.onosproject.openstacknetworking.switching.Constants.*;
+
+/**
+ * Populates switching flow rules.
+ */
+@Component(immediate = true)
+public final class OpenstackSwitchingRulePopulator extends AbstractVmHandler {
+
+    private final Logger log = LoggerFactory.getLogger(getClass());
+
+    @Reference(cardinality = ReferenceCardinality.MANDATORY_UNARY)
+    protected DeviceService deviceService;
+
+    @Reference(cardinality = ReferenceCardinality.MANDATORY_UNARY)
+    protected FlowObjectiveService flowObjectiveService;
+
+    @Reference(cardinality = ReferenceCardinality.MANDATORY_UNARY)
+    protected OpenstackNodeService nodeService;
+
+
+    private static final String TUNNEL_DST = "tunnelDst";
+
+    @Activate
+    protected void activate() {
+        super.activate();
+    }
+
+    @Deactivate
+    protected void deactivate() {
+        super.deactivate();
+    }
+
+    private void populateSwitchingRules(Host host) {
+        populateFlowRulesForTunnelTag(host);
+        populateFlowRulesForTrafficToSameCnode(host);
+        populateFlowRulesForTrafficToDifferentCnode(host);
+
+        log.debug("Populated switching rule for {}", host);
+    }
+
+    private void populateFlowRulesForTunnelTag(Host host) {
+        TrafficSelector.Builder sBuilder = DefaultTrafficSelector.builder();
+        TrafficTreatment.Builder tBuilder = DefaultTrafficTreatment.builder();
+
+        sBuilder.matchEthType(Ethernet.TYPE_IPV4)
+                .matchInPort(host.location().port());
+
+        tBuilder.setTunnelId(Long.valueOf(getVni(host)));
+
+        ForwardingObjective fo = DefaultForwardingObjective.builder()
+                .withSelector(sBuilder.build())
+                .withTreatment(tBuilder.build())
+                .withPriority(TUNNELTAG_RULE_PRIORITY)
+                .withFlag(ForwardingObjective.Flag.SPECIFIC)
+                .fromApp(appId)
+                .add();
+
+        flowObjectiveService.forward(host.location().deviceId(), fo);
+    }
+
+    private void populateFlowRulesForTrafficToSameCnode(Host host) {
+        //For L2 Switching Case
+        TrafficSelector.Builder sBuilder = DefaultTrafficSelector.builder();
+        TrafficTreatment.Builder tBuilder = DefaultTrafficTreatment.builder();
+
+        sBuilder.matchEthType(Ethernet.TYPE_IPV4)
+                .matchIPDst(getIp(host).toIpPrefix())
+                .matchTunnelId(Long.valueOf(getVni(host)));
+
+        tBuilder.setOutput(host.location().port());
+
+        ForwardingObjective fo = DefaultForwardingObjective.builder()
+                .withSelector(sBuilder.build())
+                .withTreatment(tBuilder.build())
+                .withPriority(SWITCHING_RULE_PRIORITY)
+                .withFlag(ForwardingObjective.Flag.SPECIFIC)
+                .fromApp(appId)
+                .add();
+
+        flowObjectiveService.forward(host.location().deviceId(), fo);
+    }
+
+    private void populateFlowRulesForTrafficToDifferentCnode(Host host) {
+        Ip4Address localVmIp = getIp(host);
+        DeviceId localDeviceId = host.location().deviceId();
+        Optional<IpAddress> localDataIp = nodeService.dataIp(localDeviceId);
+
+        if (!localDataIp.isPresent()) {
+            log.debug("Failed to get data IP for device {}",
+                    host.location().deviceId());
+            return;
+        }
+
+        String vni = getVni(host);
+        getVmsInDifferentCnode(host).forEach(remoteVm -> {
+            Optional<IpAddress> remoteDataIp = nodeService.dataIp(remoteVm.location().deviceId());
+            if (remoteDataIp.isPresent()) {
+                setVxLanFlowRule(vni,
+                        localDeviceId,
+                        remoteDataIp.get().getIp4Address(),
+                        getIp(remoteVm));
+
+                setVxLanFlowRule(vni,
+                        remoteVm.location().deviceId(),
+                        localDataIp.get().getIp4Address(),
+                        localVmIp);
+            }
+        });
+    }
+
+    private void setVxLanFlowRule(String vni, DeviceId deviceId, Ip4Address remoteIp,
+                                  Ip4Address vmIp) {
+        Optional<PortNumber> tunnelPort = nodeService.tunnelPort(deviceId);
+        if (!tunnelPort.isPresent()) {
+            log.warn("Failed to get tunnel port from {}", deviceId);
+            return;
+        }
+
+        TrafficSelector.Builder sBuilder = DefaultTrafficSelector.builder();
+        TrafficTreatment.Builder tBuilder = DefaultTrafficTreatment.builder();
+
+        sBuilder.matchEthType(Ethernet.TYPE_IPV4)
+                .matchTunnelId(Long.parseLong(vni))
+                .matchIPDst(vmIp.toIpPrefix());
+        tBuilder.extension(buildNiciraExtenstion(deviceId, remoteIp), deviceId)
+                .setOutput(tunnelPort.get());
+
+        ForwardingObjective fo = DefaultForwardingObjective.builder()
+                .withSelector(sBuilder.build())
+                .withTreatment(tBuilder.build())
+                .withPriority(SWITCHING_RULE_PRIORITY)
+                .withFlag(ForwardingObjective.Flag.SPECIFIC)
+                .fromApp(appId)
+                .add();
+
+        flowObjectiveService.forward(deviceId, fo);
+    }
+
+    private void removeSwitchingRules(Host host) {
+        removeFlowRuleForTunnelTag(host);
+        removeFlowRuleForVMsInSameCnode(host);
+        removeFlowRuleForVMsInDiffrentCnode(host);
+
+        log.debug("Removed switching rule for {}", host);
+    }
+
+    private void removeFlowRuleForTunnelTag(Host host) {
+        TrafficSelector.Builder sBuilder = DefaultTrafficSelector.builder();
+        TrafficTreatment.Builder tBuilder = DefaultTrafficTreatment.builder();
+
+        sBuilder.matchEthType(Ethernet.TYPE_IPV4)
+                .matchInPort(host.location().port());
+
+        ForwardingObjective fo = DefaultForwardingObjective.builder()
+                .withSelector(sBuilder.build())
+                .withTreatment(tBuilder.build())
+                .withPriority(TUNNELTAG_RULE_PRIORITY)
+                .withFlag(ForwardingObjective.Flag.SPECIFIC)
+                .fromApp(appId)
+                .remove();
+
+        flowObjectiveService.forward(host.location().deviceId(), fo);
+    }
+
+    private void removeFlowRuleForVMsInSameCnode(Host host) {
+        TrafficSelector.Builder sBuilder = DefaultTrafficSelector.builder();
+        sBuilder.matchEthType(Ethernet.TYPE_IPV4)
+                .matchIPDst(getIp(host).toIpPrefix())
+                .matchTunnelId(Long.valueOf(getVni(host)));
+
+        ForwardingObjective fo = DefaultForwardingObjective.builder()
+                .withSelector(sBuilder.build())
+                .withTreatment(DefaultTrafficTreatment.builder().build())
+                .withFlag(ForwardingObjective.Flag.SPECIFIC)
+                .withPriority(SWITCHING_RULE_PRIORITY)
+                .fromApp(appId)
+                .remove();
+
+        flowObjectiveService.forward(host.location().deviceId(), fo);
+    }
+
+    private void removeFlowRuleForVMsInDiffrentCnode(Host host) {
+        DeviceId deviceId = host.location().deviceId();
+        final boolean anyPortRemainedInSameCnode = hostService.getConnectedHosts(deviceId)
+                .stream()
+                .filter(this::isValidHost)
+                .anyMatch(h -> Objects.equals(getVni(h), getVni(host)));
+
+        getVmsInDifferentCnode(host).forEach(h -> {
+           removeVxLanFlowRule(h.location().deviceId(), getIp(host), getVni(host));
+           if (!anyPortRemainedInSameCnode) {
+               removeVxLanFlowRule(deviceId, getIp(h), getVni(host));
+           }
+       });
+    }
+
+    private void removeVxLanFlowRule(DeviceId deviceId, Ip4Address vmIp, String vni) {
+        TrafficSelector.Builder sBuilder = DefaultTrafficSelector.builder();
+
+        sBuilder.matchEthType(Ethernet.TYPE_IPV4)
+                .matchTunnelId(Long.valueOf(vni))
+                .matchIPDst(vmIp.toIpPrefix());
+
+        ForwardingObjective fo = DefaultForwardingObjective.builder()
+                .withSelector(sBuilder.build())
+                .withTreatment(DefaultTrafficTreatment.builder().build())
+                .withFlag(ForwardingObjective.Flag.SPECIFIC)
+                .withPriority(SWITCHING_RULE_PRIORITY)
+                .fromApp(appId)
+                .remove();
+
+        flowObjectiveService.forward(deviceId, fo);
+    }
+
+    private ExtensionTreatment buildNiciraExtenstion(DeviceId deviceId, Ip4Address remoteIp) {
+        Device device = deviceService.getDevice(deviceId);
+        if (device != null && !device.is(ExtensionTreatmentResolver.class)) {
+            log.error("The extension treatment is not supported");
+            return null;
+        }
+
+        ExtensionTreatmentResolver resolver = device.as(ExtensionTreatmentResolver.class);
+        ExtensionTreatment treatment = resolver.getExtensionInstruction(NICIRA_SET_TUNNEL_DST.type());
+        try {
+            treatment.setPropertyValue(TUNNEL_DST, remoteIp);
+            return treatment;
+        } catch (ExtensionPropertyException e) {
+            log.warn("Failed to get tunnelDst extension treatment for {}", deviceId);
+            return null;
+        }
+    }
+
+    @Override
+    protected void hostDetected(Host host) {
+        populateSwitchingRules(host);
+        log.info("Added new virtual machine to switching service {}", host);
+    }
+
+    @Override
+    protected void hostRemoved(Host host) {
+        removeSwitchingRules(host);
+        log.info("Removed virtual machine from switching service {}", host);
+    }
+}