diff --git a/lib/dpif-netlink.c b/lib/dpif-netlink.c
index e6d5a6ec5..b9ce9cbe2 100644
--- a/lib/dpif-netlink.c
+++ b/lib/dpif-netlink.c
@@ -2178,7 +2178,23 @@ parse_flow_put(struct dpif_netlink *dpif, struct dpif_flow_put *put)
 
         VLOG_DBG("added flow");
     } else if (err != EEXIST) {
-        VLOG_ERR_RL(&rl, "failed to offload flow: %s", ovs_strerror(err));
+        struct netdev *oor_netdev = NULL;
+        if (err == ENOSPC && netdev_is_offload_rebalance_policy_enabled()) {
+            /*
+             * We need to set OOR on the input netdev (i.e, 'dev') for the
+             * flow. But if the flow has a tunnel attribute (i.e, decap action,
+             * with a virtual device like a VxLAN interface as its in-port),
+             * then lookup and set OOR on the underlying tunnel (real) netdev.
+             */
+            oor_netdev = flow_get_tunnel_netdev(&match.flow.tunnel);
+            if (!oor_netdev) {
+                /* Not a 'tunnel' flow */
+                oor_netdev = dev;
+            }
+            netdev_set_hw_info(oor_netdev, HW_INFO_TYPE_OOR, true);
+        }
+        VLOG_ERR_RL(&rl, "failed to offload flow: %s: %s", ovs_strerror(err),
+                    (oor_netdev ? oor_netdev->name : dev->name));
     }
 
 out:
diff --git a/lib/flow.c b/lib/flow.c
index 77ed3d9df..a39807908 100644
--- a/lib/flow.c
+++ b/lib/flow.c
@@ -19,6 +19,7 @@
 #include <errno.h>
 #include <inttypes.h>
 #include <limits.h>
+#include <net/if.h>
 #include <netinet/in.h>
 #include <netinet/icmp6.h>
 #include <netinet/ip6.h>
@@ -41,6 +42,8 @@
 #include "unaligned.h"
 #include "util.h"
 #include "openvswitch/nsh.h"
+#include "ovs-router.h"
+#include "lib/netdev-provider.h"
 
 COVERAGE_DEFINE(flow_extract);
 COVERAGE_DEFINE(miniflow_malloc);
@@ -3403,3 +3406,25 @@ flow_limit_vlans(int vlan_limit)
         flow_vlan_limit = MIN(vlan_limit, FLOW_MAX_VLAN_HEADERS);
     }
 }
+
+struct netdev *
+flow_get_tunnel_netdev(struct flow_tnl *tunnel)
+{
+    char iface[IFNAMSIZ];
+    struct in6_addr ip6;
+    struct in6_addr gw;
+
+    if (tunnel->ip_src) {
+        in6_addr_set_mapped_ipv4(&ip6, tunnel->ip_src);
+    } else if (ipv6_addr_is_set(&tunnel->ipv6_src)) {
+        ip6 = tunnel->ipv6_src;
+    } else {
+        return NULL;
+    }
+
+    if (!ovs_router_lookup(0, &ip6, iface, NULL, &gw)) {
+        return NULL;
+    }
+
+    return netdev_from_name(iface);
+}
diff --git a/lib/flow.h b/lib/flow.h
index d03f1ba9c..aca60c41a 100644
--- a/lib/flow.h
+++ b/lib/flow.h
@@ -73,6 +73,7 @@ void flow_extract(struct dp_packet *, struct flow *);
 void flow_zero_wildcards(struct flow *, const struct flow_wildcards *);
 void flow_unwildcard_tp_ports(const struct flow *, struct flow_wildcards *);
 void flow_get_metadata(const struct flow *, struct match *flow_metadata);
+struct netdev *flow_get_tunnel_netdev(struct flow_tnl *tunnel);
 
 const char *ct_state_to_string(uint32_t state);
 uint32_t ct_state_from_string(const char *);
diff --git a/lib/netdev-provider.h b/lib/netdev-provider.h
index 5a7947351..e320dad61 100644
--- a/lib/netdev-provider.h
+++ b/lib/netdev-provider.h
@@ -35,6 +35,15 @@ extern "C" {
 struct netdev_tnl_build_header_params;
 #define NETDEV_NUMA_UNSPEC OVS_NUMA_UNSPEC
 
+/* Offload-capable (HW) netdev information */
+struct netdev_hw_info {
+    bool oor;		/* Out of Offload Resources ? */
+};
+
+enum hw_info_type {
+    HW_INFO_TYPE_OOR = 1	/* OOR state */
+};
+
 /* A network device (e.g. an Ethernet device).
  *
  * Network device implementations may read these members but should not modify
@@ -80,6 +89,8 @@ struct netdev {
     int n_rxq;
     struct shash_node *node;            /* Pointer to element in global map. */
     struct ovs_list saved_flags_list; /* Contains "struct netdev_saved_flags". */
+
+    struct netdev_hw_info hw_info;	/* offload-capable netdev info */
 };
 
 static inline void
diff --git a/lib/netdev.c b/lib/netdev.c
index 690d28409..3e2ce7c09 100644
--- a/lib/netdev.c
+++ b/lib/netdev.c
@@ -415,6 +415,7 @@ netdev_open(const char *name, const char *type, struct netdev **netdevp)
                 netdev->reconfigure_seq = seq_create();
                 netdev->last_reconfigure_seq =
                     seq_read(netdev->reconfigure_seq);
+                netdev->hw_info.oor = false;
                 netdev->node = shash_add(&netdev_shash, name, netdev);
 
                 /* By default enable one tx and rx queue per netdev. */
@@ -2252,6 +2253,31 @@ netdev_get_block_id(struct netdev *netdev)
             : 0);
 }
 
+/*
+ * Get the value of the hw info parameter specified by type.
+ * Returns the value on success (>= 0). Returns -1 on failure.
+ */
+int
+netdev_get_hw_info(struct netdev *netdev, int type)
+{
+    if (type == HW_INFO_TYPE_OOR) {
+        return netdev->hw_info.oor;
+    }
+
+    return -1;
+}
+
+/*
+ * Set the value of the hw info parameter specified by type.
+ */
+void
+netdev_set_hw_info(struct netdev *netdev, int type, int val)
+{
+    if (type == HW_INFO_TYPE_OOR) {
+        netdev->hw_info.oor = val;
+    }
+}
+
 bool
 netdev_is_flow_api_enabled(void)
 {
@@ -2489,6 +2515,15 @@ netdev_free_custom_stats_counters(struct netdev_custom_stats *custom_stats)
 }
 
 #ifdef __linux__
+
+static bool netdev_offload_rebalance_policy = false;
+
+bool
+netdev_is_offload_rebalance_policy_enabled(void)
+{
+    return netdev_offload_rebalance_policy;
+}
+
 static void
 netdev_ports_flow_init(void)
 {
diff --git a/lib/netdev.h b/lib/netdev.h
index 556676046..b0e5c5b72 100644
--- a/lib/netdev.h
+++ b/lib/netdev.h
@@ -227,8 +227,11 @@ int netdev_flow_del(struct netdev *, const ovs_u128 *,
                     struct dpif_flow_stats *);
 int netdev_init_flow_api(struct netdev *);
 uint32_t netdev_get_block_id(struct netdev *);
+int netdev_get_hw_info(struct netdev *, int);
+void netdev_set_hw_info(struct netdev *, int, int);
 bool netdev_is_flow_api_enabled(void);
 void netdev_set_flow_api_enabled(const struct smap *ovs_other_config);
+bool netdev_is_offload_rebalance_policy_enabled(void);
 
 struct dpif_port;
 int netdev_ports_insert(struct netdev *, const struct dpif_class *,
