diff --git a/CHANGELOG.md b/CHANGELOG.md
index b8ce64a6a..755f92ee3 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -10,6 +10,10 @@ ENHANCEMENTS:
 
 * resources/opennebula_template: enable disk and nic update (#491)
 
+BUG FIXES:
+
+* resources/opennebula_virtual_router_instance: fix re-contextualization (#537)
+
 # 1.4.0 (January 22nd, 2024)
 
 FEATURES:
diff --git a/opennebula/resource_opennebula_virtual_machine.go b/opennebula/resource_opennebula_virtual_machine.go
index 949408609..8efbe5fde 100644
--- a/opennebula/resource_opennebula_virtual_machine.go
+++ b/opennebula/resource_opennebula_virtual_machine.go
@@ -605,17 +605,21 @@ func resourceOpennebulaVirtualMachineRead(ctx context.Context, d *schema.Resourc
 
 		var diags diag.Diagnostics
 
-		// read template ID from which the VM was created
-		templateID, _ := vmInfos.Template.GetInt("TEMPLATE_ID")
-		d.Set("template_id", templateID)
+		// NOTE: The template_id attribute is not defined for Virtual Router instances (VMs).
+		if _, ok := d.GetOk("template_id"); ok {
+			// read template ID from which the VM was created
+			templateID, _ := vmInfos.Template.GetInt("TEMPLATE_ID")
+			d.Set("template_id", templateID)
+
+			if _, ok := d.GetOk("template_nic"); !ok {
+				d.Set("template_nic", []interface{}{})
+			}
+		}
 
 		// add empty values for import
 		if _, ok := d.GetOk("template_disk"); !ok {
 			d.Set("template_disk", []interface{}{})
 		}
-		if _, ok := d.GetOk("template_nic"); !ok {
-			d.Set("template_nic", []interface{}{})
-		}
 		if _, ok := d.GetOk("template_tags"); !ok {
 			d.Set("template_tags", map[string]interface{}{})
 		}
@@ -632,14 +636,19 @@ func resourceOpennebulaVirtualMachineRead(ctx context.Context, d *schema.Resourc
 			})
 			return diags
 		}
-		err = flattenVMNIC(d, &vmInfos.Template)
-		if err != nil {
-			diags = append(diags, diag.Diagnostic{
-				Severity: diag.Error,
-				Summary:  "Failed to flatten NICs",
-				Detail:   fmt.Sprintf("virtual machine (ID: %s): %s", d.Id(), err),
-			})
-			return diags
+
+		// In case of Virtual Router instances (which are just VMs) there's never anything to "flatten",
+		// that's because NICs are attached with a help of dedicated resources.
+		if _, ok := d.GetOk("nic"); ok {
+			err = flattenVMNIC(d, &vmInfos.Template)
+			if err != nil {
+				diags = append(diags, diag.Diagnostic{
+					Severity: diag.Error,
+					Summary:  "Failed to flatten NICs",
+					Detail:   fmt.Sprintf("virtual machine (ID: %s): %s", d.Id(), err),
+				})
+				return diags
+			}
 		}
 
 		return nil
diff --git a/opennebula/resource_opennebula_virtual_router_test.go b/opennebula/resource_opennebula_virtual_router_test.go
index e758fc583..e59745847 100644
--- a/opennebula/resource_opennebula_virtual_router_test.go
+++ b/opennebula/resource_opennebula_virtual_router_test.go
@@ -90,6 +90,22 @@ func TestAccVirtualRouter(t *testing.T) {
 					}, "testacc-vr"),
 				),
 			},
+			{
+				Config: testAccVirtualRouterContextUpdate,
+				Check: resource.ComposeTestCheckFunc(
+					resource.TestCheckResourceAttr("opennebula_virtual_router_instance.test2", "context.update_test", "123"),
+					resource.TestCheckResourceAttrSet("opennebula_virtual_router.test", "uid"),
+					resource.TestCheckResourceAttrSet("opennebula_virtual_router.test", "gid"),
+					resource.TestCheckResourceAttrSet("opennebula_virtual_router.test", "uname"),
+					resource.TestCheckResourceAttrSet("opennebula_virtual_router.test", "gname"),
+					testAccCheckVirtualRouterPermissions(&shared.Permissions{
+						OwnerU: 1,
+						OwnerM: 1,
+						GroupU: 1,
+						OtherM: 1,
+					}, "testacc-vr"),
+				),
+			},
 			{
 				Config: testAccVirtualRouterAddNICs,
 				Check: resource.ComposeTestCheckFunc(
@@ -371,6 +387,46 @@ resource "opennebula_virtual_router" "test" {
 }
 `
 
+var testAccVirtualRouterContextUpdate = testAccVirtualRouterMachineTemplate + `
+
+resource "opennebula_virtual_router_instance" "test" {
+	name        = "testacc-vr-virtual-machine"
+	group       = "oneadmin"
+	permissions = "642"
+	memory = 128
+	cpu = 0.1
+
+	virtual_router_id = opennebula_virtual_router.test.id
+}
+
+
+resource "opennebula_virtual_router_instance" "test2" {
+	name        = "testacc-vr-virtual-machine-2"
+	group       = "oneadmin"
+	permissions = "642"
+	memory = 128
+	cpu = 0.1
+
+	virtual_router_id = opennebula_virtual_router.test.id
+
+	context = {
+	  update_test = "123"
+	}
+}
+
+resource "opennebula_virtual_router" "test" {
+  name = "testacc-vr"
+  permissions = "642"
+  group = "oneadmin"
+
+  instance_template_id = opennebula_virtual_router_instance_template.test.id
+
+  tags = {
+    customer = "1"
+  }
+}
+`
+
 var testAccVirtualRouterAddNICs = testAccVirtualRouterMachineTemplate + testAccVirtualRouterVNet + `
 
 resource "opennebula_virtual_router_instance" "test" {