diff --git a/Makefile b/Makefile
index 2732500a..2bcc05a1 100644
--- a/Makefile
+++ b/Makefile
@@ -111,8 +111,8 @@ vet: ## Run go vet against code.
 	go vet ./...
 
 .PHONY: test
-test: manifests generate fmt vet envtest ## Run tests.
-	KUBEBUILDER_ASSETS="$(shell $(ENVTEST) use $(ENVTEST_K8S_VERSION) --bin-dir $(LOCALBIN) -p path)" go test ./... -coverprofile cover.out
+test: manifests generate fmt vet envtest ginkgo ## Run tests.
+	KUBEBUILDER_ASSETS="$(shell $(ENVTEST) use $(ENVTEST_K8S_VERSION) --bin-dir $(LOCALBIN) -p path)" $(GINKGO) run --succinct -p ./... -coverprofile cover.out
 
 ##@ Build
 
@@ -202,6 +202,7 @@ $(LOCALBIN):
 KUSTOMIZE ?= $(LOCALBIN)/kustomize
 CONTROLLER_GEN ?= $(LOCALBIN)/controller-gen
 ENVTEST ?= $(LOCALBIN)/setup-envtest
+GINKGO ?= $(LOCALBIN)/ginkgo
 
 ## Tool Versions
 KUSTOMIZE_VERSION ?= v3.8.7
@@ -228,6 +229,11 @@ envtest: $(ENVTEST) ## Download envtest-setup locally if necessary.
 $(ENVTEST): $(LOCALBIN)
 	test -s $(LOCALBIN)/setup-envtest || GOBIN=$(LOCALBIN) go install sigs.k8s.io/controller-runtime/tools/setup-envtest@latest
 
+.PHONY: ginkgo
+ginkgo: $(GINKGO) ## Download envtest-setup locally if necessary.
+$(GINKGO): $(LOCALBIN)
+	test -s $(LOCALBIN)/ginkgo || GOBIN=$(LOCALBIN) go install github.com/onsi/ginkgo/v2/ginkgo
+
 .PHONY: operator-sdk
 OPERATOR_SDK ?= $(LOCALBIN)/operator-sdk
 operator-sdk: ## Download operator-sdk locally if necessary.
diff --git a/controllers/onload_controller.go b/controllers/onload_controller.go
index 935258fa..b540cc53 100644
--- a/controllers/onload_controller.go
+++ b/controllers/onload_controller.go
@@ -323,7 +323,8 @@ func (r *OnloadReconciler) addOnloadLabelsToNodes(ctx context.Context, onload *o
 		if node.Labels[kmmLabel] != onload.Spec.Onload.Version {
 			continue
 		}
-		if _, found := node.Labels[labelKey]; !found {
+		value, found := node.Labels[labelKey]
+		if !found {
 			nodeCopy := node.DeepCopy()
 			node.Labels[labelKey] = onload.Spec.Onload.Version
 			err := r.Patch(ctx, &node, client.MergeFrom(nodeCopy))
@@ -333,6 +334,16 @@ func (r *OnloadReconciler) addOnloadLabelsToNodes(ctx context.Context, onload *o
 				return nil, err
 			}
 			changesMade = true
+		} else if value != onload.Spec.Onload.Version {
+			nodeCopy := node.DeepCopy()
+			delete(node.Labels, labelKey)
+			err := r.Patch(ctx, &node, client.MergeFrom(nodeCopy))
+			if err != nil {
+				log.Error(err, "Failed to remove old label from Node",
+					"Node", node.Name)
+				return nil, err
+			}
+			changesMade = true
 		}
 	}
 
diff --git a/controllers/onload_controller_test.go b/controllers/onload_controller_test.go
index 3d0726fc..34ee87d6 100644
--- a/controllers/onload_controller_test.go
+++ b/controllers/onload_controller_test.go
@@ -3,6 +3,7 @@
 package controllers
 
 import (
+	"context"
 	"errors"
 	"strconv"
 	"time"
@@ -22,6 +23,8 @@ import (
 
 	ctrl "sigs.k8s.io/controller-runtime"
 	"sigs.k8s.io/controller-runtime/pkg/client"
+	"sigs.k8s.io/controller-runtime/pkg/envtest"
+	"sigs.k8s.io/controller-runtime/pkg/manager"
 
 	onloadv1alpha1 "github.com/Xilinx-CNS/kubernetes-onload/api/v1alpha1"
 	mock_client "github.com/Xilinx-CNS/kubernetes-onload/mocks/client"
@@ -838,3 +841,279 @@ var _ = Describe("onload controller", func() {
 		})
 	})
 })
+
+// Please note that each of these tests will spin-up a new envtest cluster
+// before each test and destroy it after. This has quite a heavy time cost, so
+// if possible please try to test functionality in a "lighter" way.
+// Running tests on an Intel(R) Xeon(R) Silver 4216 CPU @ 2.10GHz showed that
+// adding an empty test would increase the time taken to run `make test` by ~5s
+var _ = Describe("Recovery from a non-clean state", func() {
+
+	// Shadowing variables that relate to the env test cluster.
+	var (
+		k8sManager manager.Manager
+		k8sClient  client.Client
+		testEnv    *envtest.Environment
+		ctx        context.Context
+		cancel     context.CancelFunc
+	)
+
+	// General definitions for tests
+	var (
+		onload           onloadv1alpha1.Onload
+		devicePlugin     appsv1.DaemonSet
+		devicePluginName types.NamespacedName
+		module           kmm.Module
+	)
+
+	BeforeEach(func() {
+
+		ctx, cancel, testEnv, k8sClient, k8sManager = createEnvTestCluster()
+
+		onload = onloadv1alpha1.Onload{
+			ObjectMeta: metav1.ObjectMeta{
+				Name:      "onload-test",
+				Namespace: "default",
+			},
+			Spec: onloadv1alpha1.Spec{
+				Selector: map[string]string{
+					"key": "value",
+				},
+				Onload: onloadv1alpha1.OnloadSpec{
+					KernelMappings: []onloadv1alpha1.OnloadKernelMapping{
+						{
+							KernelModuleImage: "",
+							Regexp:            "",
+						},
+					},
+					UserImage: "image:tag",
+					Version:   "old",
+				},
+				DevicePlugin: onloadv1alpha1.DevicePluginSpec{
+					DevicePluginImage: "image:tag",
+				},
+				ServiceAccountName: "",
+			},
+		}
+
+		devicePluginName = types.NamespacedName{
+			Name:      onload.Name + "-onload-device-plugin-ds",
+			Namespace: onload.Namespace,
+		}
+
+		dsLabels := map[string]string{"onload.amd.com/name": devicePluginName.Name}
+		devicePlugin = appsv1.DaemonSet{
+			ObjectMeta: metav1.ObjectMeta{
+				Name:      devicePluginName.Name,
+				Namespace: devicePluginName.Namespace,
+				Labels:    map[string]string{onloadVersionLabel: onload.Spec.Onload.Version},
+			},
+			Spec: appsv1.DaemonSetSpec{
+				Selector: &metav1.LabelSelector{MatchLabels: dsLabels},
+				Template: corev1.PodTemplateSpec{
+					ObjectMeta: metav1.ObjectMeta{
+						Labels: dsLabels,
+					},
+					Spec: corev1.PodSpec{
+						Containers: []corev1.Container{
+							{Name: "foo", Image: "bar"},
+						},
+						InitContainers: []corev1.Container{
+							{
+								Name: "init", Image: onload.Spec.Onload.UserImage,
+							},
+						},
+					},
+				},
+			},
+		}
+
+		module = kmm.Module{
+			ObjectMeta: metav1.ObjectMeta{
+				Name:      onload.Name + onloadModuleNameSuffix,
+				Namespace: onload.Namespace,
+			},
+			Spec: kmm.ModuleSpec{
+				Selector: onload.Spec.Selector,
+				ModuleLoader: kmm.ModuleLoaderSpec{
+					Container: kmm.ModuleLoaderContainerSpec{
+						KernelMappings: []kmm.KernelMapping{{}},
+					},
+				},
+			},
+		}
+	})
+
+	AfterEach(func() {
+		cancel()
+		err := testEnv.Stop()
+		Expect(err).NotTo(HaveOccurred())
+	})
+
+	It("shouldn't remove existing operands", func() {
+		Expect(k8sClient.Create(ctx, &onload)).Should(Succeed())
+
+		Expect(ctrl.SetControllerReference(&onload, &devicePlugin, testEnv.Scheme)).Should(Succeed())
+		Expect(k8sClient.Create(ctx, &devicePlugin)).Should(Succeed())
+
+		startReconciler(k8sManager, ctx)
+
+		// Create a new object so we can compare the old and new versions of the
+		// object
+		newDevicePlugin := appsv1.DaemonSet{}
+
+		Eventually(func() bool {
+			err := k8sClient.Get(ctx, devicePluginName, &newDevicePlugin)
+			return err == nil
+		}, timeout, pollingInterval).Should(BeTrue())
+
+		Expect(newDevicePlugin.UID).To(Equal(devicePlugin.UID))
+	})
+
+	// These test are restricted to testing the upgrading of the operands. Tests
+	// that use Nodes are in a subsequent section.
+	It("should continue upgrade process (device plugin)", func() {
+
+		// Fake the upgrade, the device plugin is still using the old values
+		onload.Spec.Onload.Version = "new"
+		onload.Spec.Onload.UserImage = "image:tag-newer"
+
+		Expect(onload.Spec.Onload.Version).ShouldNot(Equal(devicePlugin.Labels[onloadVersionLabel]))
+
+		Expect(k8sClient.Create(ctx, &onload)).Should(Succeed())
+
+		Expect(ctrl.SetControllerReference(&onload, &devicePlugin, testEnv.Scheme)).Should(Succeed())
+		Expect(k8sClient.Create(ctx, &devicePlugin)).Should(Succeed())
+
+		startReconciler(k8sManager, ctx)
+
+		// Create a new object so we can compare the old and new versions of the
+		// object
+		newDevicePlugin := appsv1.DaemonSet{}
+
+		Eventually(func(g Gomega) {
+			g.Expect(k8sClient.Get(ctx, client.ObjectKeyFromObject(&devicePlugin), &newDevicePlugin)).Should(Succeed())
+			g.Expect(newDevicePlugin.UID).To(Equal(devicePlugin.UID))
+			g.Expect(newDevicePlugin.Labels[onloadVersionLabel]).ShouldNot(Equal(devicePlugin.Labels[onloadVersionLabel]))
+			g.Expect(newDevicePlugin.Labels[onloadVersionLabel]).Should(Equal(onload.Spec.Onload.Version))
+		}, timeout, pollingInterval).Should(Succeed())
+
+	})
+
+	It("should continue upgrade process (module)", func() {
+		// Fake the upgrade, the operand is still using the old values
+		onload.Spec.Onload.Version = "new"
+		onload.Spec.Onload.UserImage = "image:tag-newer"
+
+		Expect(onload.Spec.Onload.Version).ShouldNot(Equal(module.Spec.ModuleLoader.Container.Version))
+
+		Expect(k8sClient.Create(ctx, &onload)).Should(Succeed())
+
+		Expect(ctrl.SetControllerReference(&onload, &module, testEnv.Scheme)).Should(Succeed())
+		Expect(k8sClient.Create(ctx, &module)).Should(Succeed())
+
+		startReconciler(k8sManager, ctx)
+
+		// Create a new object so we can compare the old and new versions of the
+		// object
+		newModule := kmm.Module{}
+
+		Eventually(func(g Gomega) {
+			g.Expect(k8sClient.Get(ctx, client.ObjectKeyFromObject(&module), &newModule)).Should(Succeed())
+			g.Expect(newModule.UID).To(Equal(module.UID))
+			g.Expect(newModule.Spec.ModuleLoader.Container.Version).ShouldNot(Equal(module.Spec.ModuleLoader.Container.Version))
+			g.Expect(newModule.Spec.ModuleLoader.Container.Version).Should(Equal(onload.Spec.Onload.Version))
+		}, timeout, pollingInterval).Should(Succeed())
+
+	})
+
+	Describe("Node-based tests", func() {
+
+		var (
+			node           corev1.Node
+			kmmOnloadLabel string
+			dpOnloadLabel  string
+		)
+
+		BeforeEach(func() {
+			node = corev1.Node{
+				ObjectMeta: metav1.ObjectMeta{
+					Name: "test-node",
+					Labels: map[string]string{
+						"key": "value",
+					},
+				},
+			}
+
+			kmmOnloadLabel = kmmOnloadLabelName(onload.Name, onload.Namespace)
+			dpOnloadLabel = onloadLabelName(onload.Name, onload.Namespace)
+		})
+
+		It("should add the initial labels", func() {
+
+			Expect(k8sClient.Create(ctx, &node)).Should(Succeed())
+
+			Expect(k8sClient.Create(ctx, &onload)).Should(Succeed())
+
+			startReconciler(k8sManager, ctx)
+
+			newNode := corev1.Node{}
+			Eventually(func(g Gomega) {
+				g.Expect(k8sClient.Get(ctx, client.ObjectKeyFromObject(&node), &newNode)).Should(Succeed())
+				g.Expect(newNode.Labels[kmmOnloadLabel]).Should(Equal(onload.Spec.Onload.Version))
+				g.Expect(newNode.Labels[dpOnloadLabel]).Should(Equal(onload.Spec.Onload.Version))
+			}, timeout, pollingInterval).Should(Succeed())
+		})
+
+		// Want to test 3 different values for each label/version: unset, old and new
+		DescribeTable("controller starting at different points during upgrade",
+			func(label1, label2 string) {
+				if label1 != "" {
+					node.Labels[kmmOnloadLabel] = label1
+				}
+
+				if label2 != "" {
+					node.Labels[dpOnloadLabel] = label2
+				}
+
+				Expect(k8sClient.Create(ctx, &node)).Should(Succeed())
+
+				onload.Spec.Onload.Version = "new"
+				onload.Spec.Onload.UserImage = "image:tag-newer"
+				Expect(k8sClient.Create(ctx, &onload)).Should(Succeed())
+
+				if label1 != "" {
+					module.Spec.ModuleLoader.Container.Version = label1
+				}
+				Expect(ctrl.SetControllerReference(&onload, &module, testEnv.Scheme)).Should(Succeed())
+
+				if label2 != "" {
+					devicePlugin.Labels[onloadVersionLabel] = label2
+				}
+				Expect(ctrl.SetControllerReference(&onload, &devicePlugin, testEnv.Scheme)).Should(Succeed())
+
+				Expect(k8sClient.Create(ctx, &module)).Should(Succeed())
+				Expect(k8sClient.Create(ctx, &devicePlugin)).Should(Succeed())
+
+				startReconciler(k8sManager, ctx)
+
+				newNode := corev1.Node{}
+				Eventually(func(g Gomega) {
+					g.Expect(k8sClient.Get(ctx, client.ObjectKeyFromObject(&node), &newNode)).Should(Succeed())
+					g.Expect(newNode.Labels[kmmOnloadLabel]).Should(Equal(onload.Spec.Onload.Version))
+					g.Expect(newNode.Labels[dpOnloadLabel]).Should(Equal(onload.Spec.Onload.Version))
+				}, timeout, pollingInterval).Should(Succeed())
+			},
+			Entry("00", "", ""),
+			Entry("01", "", "old"), // I don't think this should be able to happen
+			Entry("02", "", "new"),
+			Entry("10", "old", ""),
+			Entry("11", "old", "old"),
+			Entry("12", "old", "new"),
+			Entry("20", "new", ""),
+			Entry("21", "new", "old"), // I don't think this should be able to happen
+			Entry("22", "new", "new"),
+		)
+	})
+
+})
diff --git a/controllers/suite_test.go b/controllers/suite_test.go
index 0cc3e8c7..25dcc406 100644
--- a/controllers/suite_test.go
+++ b/controllers/suite_test.go
@@ -15,11 +15,11 @@ import (
 
 	"k8s.io/apimachinery/pkg/util/rand"
 	"k8s.io/client-go/kubernetes/scheme"
-	"k8s.io/client-go/rest"
 	"sigs.k8s.io/controller-runtime/pkg/client"
 	"sigs.k8s.io/controller-runtime/pkg/envtest"
 	logf "sigs.k8s.io/controller-runtime/pkg/log"
 	"sigs.k8s.io/controller-runtime/pkg/log/zap"
+	"sigs.k8s.io/controller-runtime/pkg/metrics/server"
 
 	"sigs.k8s.io/controller-runtime/pkg/manager"
 
@@ -32,7 +32,6 @@ import (
 // These tests use Ginkgo (BDD-style Go testing framework). Refer to
 // http://onsi.github.io/ginkgo/ to learn more about Ginkgo.
 
-var cfg *rest.Config
 var k8sClient client.Client
 var testEnv *envtest.Environment
 
@@ -47,9 +46,9 @@ var (
 	cancel context.CancelFunc
 )
 
-var _ = BeforeSuite(func() {
-	logf.SetLogger(zap.New(zap.WriteTo(GinkgoWriter), zap.UseDevMode(true)))
-	ctx, cancel = context.WithCancel(context.TODO())
+func createEnvTestCluster() (context.Context, context.CancelFunc,
+	*envtest.Environment, client.Client, manager.Manager) {
+	ctx, cancel := context.WithCancel(context.TODO())
 
 	By("bootstrapping test environment")
 	testEnv = &envtest.Environment{
@@ -67,7 +66,7 @@ var _ = BeforeSuite(func() {
 
 	var err error
 	// cfg is defined in this file globally.
-	cfg, err = testEnv.Start()
+	cfg, err := testEnv.Start()
 	Expect(err).NotTo(HaveOccurred())
 	Expect(cfg).NotTo(BeNil())
 
@@ -79,15 +78,22 @@ var _ = BeforeSuite(func() {
 
 	//+kubebuilder:scaffold:scheme
 
-	k8sClient, err = client.New(cfg, client.Options{Scheme: scheme.Scheme})
+	k8sClient, err := client.New(cfg, client.Options{Scheme: scheme.Scheme})
 	Expect(err).NotTo(HaveOccurred())
 	Expect(k8sClient).NotTo(BeNil())
 
-	k8sManager, err := manager.New(cfg, manager.Options{Scheme: scheme.Scheme})
+	k8sManager, err := manager.New(cfg, manager.Options{
+		Scheme:  scheme.Scheme,
+		Metrics: server.Options{BindAddress: "0"},
+	})
 	Expect(err).NotTo(HaveOccurred())
 	Expect(k8sManager).NotTo(BeNil())
 
-	err = (&OnloadReconciler{
+	return ctx, cancel, testEnv, k8sClient, k8sManager
+}
+
+func startReconciler(k8sManager manager.Manager, ctx context.Context) {
+	err := (&OnloadReconciler{
 		Client: k8sManager.GetClient(),
 		Scheme: k8sManager.GetScheme(),
 	}).SetupWithManager(k8sManager)
@@ -95,9 +101,18 @@ var _ = BeforeSuite(func() {
 
 	go func() {
 		defer GinkgoRecover()
-		err = k8sManager.Start(ctx)
+		err := k8sManager.Start(ctx)
 		Expect(err).ToNot(HaveOccurred(), "failed to run manager")
 	}()
+}
+
+var _ = BeforeSuite(func() {
+	logf.SetLogger(zap.New(zap.WriteTo(GinkgoWriter), zap.UseDevMode(true)))
+
+	var k8sManager manager.Manager
+	ctx, cancel, testEnv, k8sClient, k8sManager = createEnvTestCluster()
+
+	startReconciler(k8sManager, ctx)
 
 	// k8s.io/apimachinery/pkg/util/rand is only used to generate unique
 	// namesapces that tests will run in. A fixed seed is used to make this more