Automating Ubuntu VM Deployment on Proxmox VE with Terraform + Cloud-Init

In modern infrastructure management, repeatability and automation are key. Manually creating VMs through a GUI works for quick tests, but it doesn’t scale, and it’s error-prone.

In this post, I’ll share how I automated the creation of multiple Ubuntu 22.04 VMs on Proxmox VE 8.4 using Terraform and cloud-init — complete with static IP addresses, and configured for password authentication without SSH keys.

🛠 Why Terraform with Proxmox?

Terraform lets you define infrastructure as code (IaC).

• You can version control your setup

• Spin up or destroy VMs in seconds

• Enforce consistency across environments

Proxmox has an API, and the Telmate Terraform provider makes it possible to drive VM creation directly from your .tf files.

🗂 Folder Structure
.

├── main.tf # The VM resource definitions

├── variables.tf # All configuration variables

├── versions.tf # Terraform & provider versions

├── terraform.tfvars # My actual values for variables

🔧 What I Built

I created a Terraform configuration that:

• Connects to Proxmox via API token authentication

• Clones a cloud-init–enabled Ubuntu 22.04 template

• Deploys three VMs with:

  • Static IP addresses

  • Cloud-init user accounts

  • Password authentication instead of SSH keys

• Outputs VM names and IDs automatically after provisioning

Pre-requisite:

• Proxmox VE-8.4 installed

• Terraform installed on Local machine

• Properly configured Network on Proxmox

Task List for automation:

• Ubuntu VM template ready from Proxmox CLI

• Proxmox User creation and api token configuration

• Writing the terraform artifact

Ubuntu VM template ready from Proxmox CLI

#Run on the Proxmox node (adjust storage if not local-lvm):

# 1) Get Ubuntu 22.04 cloud image
cd /var/lib/vz/template/iso wget -O jammy.img https://cloud-images.ubuntu.com/jammy/current/jammy-server-cloudimg-amd64.img

# 2) Create a VM shell (ID 9000) for the template
qm create 9000 --name ubuntu-22.04-ci-template --memory 2048 --cores 2 \
  --net0 virtio,bridge=vmbr0

# 3) Import the cloud image as a disk on your storage (edit storage if needed)
qm importdisk 9000 /var/lib/vz/template/iso/jammy.img local-lvm

# 4) Attach disk + cloud-init, set boot order
qm set 9000 --scsihw virtio-scsi-pci --scsi0 local-lvm:vm-9000-disk-0
qm set 9000 --ide2 local-lvm:cloudinit
qm set 9000 --boot c --bootdisk scsi0
qm set 9000 --serial0 socket --vga serial0

# (optional) grow disk to match your TF var (e.g., 25G)
qm resize 9000 scsi0 25G

# 5) Enable QEMU guest agent (useful for IP reporting)
qm set 9000 --agent enabled=1

# 6) Convert to template
qm template 9000

Proxmox User creation and api token configuration

In the Proxmox web UI:

• Go to Datacenter → Permissions → Users → Add.

• User ID: terraform

• Realm: pve (or pam if you want system authentication)

• Password: (set any; not used for token auth)

• Click Add.

# 1) make sure the user exists in pve realm

pveum user add terraform@pve || true

# 2) (optional) give the user a password you’ll remember

pveum passwd terraform@pve

# 3) create a new API token WITH privilege separation

pveum user token add terraform@pve tf --privsep 1

# -> copy the returned "value" (token secret). Keep it safe.

Check Your API and user from Postman

curl -k -H "Authorization: PVEAPIToken=terraform@pve!tf=your api token" \
  https://192.168.31.43:8006/api2/json/access/users

Github Link for Terraform Code

rm -rf .terraform .terraform.lock.hcl # If previous step was hold
terraform init -upgrade
terraform plan
terraform apply