diff --git a/pkg/model/azuremodel/vmscaleset.go b/pkg/model/azuremodel/vmscaleset.go
index 916a755792..561f7a30b3 100644
--- a/pkg/model/azuremodel/vmscaleset.go
+++ b/pkg/model/azuremodel/vmscaleset.go
@@ -176,9 +176,7 @@ func getStorageProfile(spec *kops.InstanceGroupSpec) (*compute.VirtualMachineSca
 		storageAccountType = compute.StorageAccountTypesPremiumLRS
 	}
 
-	// TODO(kenji): We currently assume that spec.Image has an
-	// image URN. Be able to specify image ID as well.
-	imageReference, err := parseImageURN(spec.Image)
+	imageReference, err := parseImage(spec.Image)
 	if err != nil {
 		return nil, err
 	}
@@ -198,14 +196,17 @@ func getStorageProfile(spec *kops.InstanceGroupSpec) (*compute.VirtualMachineSca
 	}, nil
 }
 
-// parseImageURN parses an image URL and returns an ImageReference.
-func parseImageURN(urn string) (*compute.ImageReference, error) {
-	// Image URN is of the form <publisher>:<offer>:<sku>:<version>.
-	l := strings.Split(urn, ":")
-	if len(l) != 4 {
-		return nil, fmt.Errorf("malformed format of image urn: %s", urn)
+func parseImage(image string) (*compute.ImageReference, error) {
+	if strings.HasPrefix(image, "/subscriptions/") {
+		return &compute.ImageReference{
+			ID: to.StringPtr(image),
+		}, nil
 	}
 
+	l := strings.Split(image, ":")
+	if len(l) != 4 {
+		return nil, fmt.Errorf("malformed format of image urn: %s", image)
+	}
 	return &compute.ImageReference{
 		Publisher: to.StringPtr(l[0]),
 		Offer:     to.StringPtr(l[1]),
diff --git a/pkg/model/azuremodel/vmscaleset_test.go b/pkg/model/azuremodel/vmscaleset_test.go
index d7aa47b1b8..986287a0f2 100644
--- a/pkg/model/azuremodel/vmscaleset_test.go
+++ b/pkg/model/azuremodel/vmscaleset_test.go
@@ -176,14 +176,14 @@ func TestGetStorageProfile(t *testing.T) {
 	}
 }
 
-func TestParseImageURN(t *testing.T) {
+func TestParseImage(t *testing.T) {
 	testCases := []struct {
-		urn      string
+		image    string
 		success  bool
 		imageRef *compute.ImageReference
 	}{
 		{
-			urn:     "Canonical:UbuntuServer:18.04-LTS:latest",
+			image:   "Canonical:UbuntuServer:18.04-LTS:latest",
 			success: true,
 			imageRef: &compute.ImageReference{
 				Publisher: to.StringPtr("Canonical"),
@@ -193,17 +193,24 @@ func TestParseImageURN(t *testing.T) {
 			},
 		},
 		{
-			urn:     "invalidformat",
+			image:   "/subscriptions/<subscription id>/resourceGroups/<resource group>/providers/<provider>/images/<image>",
+			success: true,
+			imageRef: &compute.ImageReference{
+				ID: to.StringPtr("/subscriptions/<subscription id>/resourceGroups/<resource group>/providers/<provider>/images/<image>"),
+			},
+		},
+		{
+			image:   "invalidformat",
 			success: false,
 		},
 		{
-			urn:     "inv:ali:dfo:rma:t",
+			image:   "inv:ali:dfo:rma:t",
 			success: false,
 		},
 	}
 	for i, tc := range testCases {
 		t.Run(fmt.Sprintf("test case %d", i), func(t *testing.T) {
-			imageRef, err := parseImageURN(tc.urn)
+			imageRef, err := parseImage(tc.image)
 			if !tc.success {
 				if err == nil {
 					t.Fatalf("unexpected success")