diff --git a/fs_mgr/libsnapshot/snapshot.cpp b/fs_mgr/libsnapshot/snapshot.cpp
index 10d2f18..961db02 100644
--- a/fs_mgr/libsnapshot/snapshot.cpp
+++ b/fs_mgr/libsnapshot/snapshot.cpp
@@ -1498,6 +1498,7 @@
     if (UpdateUsesUserSnapshots(lock) && !device()->IsTestDevice()) {
         if (snapuserd_client_) {
             snapuserd_client_->DetachSnapuserd();
+            snapuserd_client_->RemoveTransitionedDaemonIndicator();
             snapuserd_client_ = nullptr;
         }
     }
diff --git a/fs_mgr/libsnapshot/snapuserd/Android.bp b/fs_mgr/libsnapshot/snapuserd/Android.bp
index 64e0b8a..a67e37c 100644
--- a/fs_mgr/libsnapshot/snapuserd/Android.bp
+++ b/fs_mgr/libsnapshot/snapuserd/Android.bp
@@ -37,11 +37,13 @@
 cc_library_static {
     name: "libsnapshot_snapuserd",
     defaults: [
+        "fs_mgr_defaults",
         "libsnapshot_snapuserd_defaults",
     ],
     recovery_available: true,
     static_libs: [
         "libcutils_sockets",
+        "libfs_mgr",
     ],
     shared_libs: [
         "libbase",
@@ -49,6 +51,7 @@
     ],
     export_include_dirs: ["include"],
     ramdisk_available: true,
+    vendor_ramdisk_available: true,
 }
 
 cc_defaults {
@@ -86,6 +89,7 @@
         "libgflags",
         "liblog",
         "libsnapshot_cow",
+        "libsnapshot_snapuserd",
         "libz",
         "liblz4",
         "libext4_utils",
diff --git a/fs_mgr/libsnapshot/snapuserd/include/snapuserd/snapuserd_client.h b/fs_mgr/libsnapshot/snapuserd/include/snapuserd/snapuserd_client.h
index 4b62b20..fb2251e 100644
--- a/fs_mgr/libsnapshot/snapuserd/include/snapuserd/snapuserd_client.h
+++ b/fs_mgr/libsnapshot/snapuserd/include/snapuserd/snapuserd_client.h
@@ -32,6 +32,7 @@
 
 static constexpr char kSnapuserdSocket[] = "snapuserd";
 static constexpr char kSnapuserdSocketProxy[] = "snapuserd_proxy";
+static constexpr char kDaemonAliveIndicator[] = "daemon-alive-indicator";
 
 // Ensure that the second-stage daemon for snapuserd is running.
 bool EnsureSnapuserdStarted();
@@ -44,9 +45,11 @@
     std::string Receivemsg();
 
     bool ValidateConnection();
+    std::string GetDaemonAliveIndicatorPath();
 
   public:
     explicit SnapuserdClient(android::base::unique_fd&& sockfd);
+    SnapuserdClient(){};
 
     static std::unique_ptr<SnapuserdClient> Connect(const std::string& socket_name,
                                                     std::chrono::milliseconds timeout_ms);
@@ -91,6 +94,17 @@
     // Check the update verification status - invoked by update_verifier during
     // boot
     bool QueryUpdateVerification();
+
+    // Check if Snapuser daemon is ready post selinux transition after OTA boot
+    // This is invoked only by init as there is no sockets setup yet during
+    // selinux transition
+    bool IsTransitionedDaemonReady();
+
+    // Remove the daemon-alive-indicator path post snapshot merge
+    bool RemoveTransitionedDaemonIndicator();
+
+    // Notify init that snapuserd daemon is ready post selinux transition
+    void NotifyTransitionDaemonIsReady();
 };
 
 }  // namespace snapshot
diff --git a/fs_mgr/libsnapshot/snapuserd/snapuserd_client.cpp b/fs_mgr/libsnapshot/snapuserd/snapuserd_client.cpp
index e08cf9b..695b581 100644
--- a/fs_mgr/libsnapshot/snapuserd/snapuserd_client.cpp
+++ b/fs_mgr/libsnapshot/snapuserd/snapuserd_client.cpp
@@ -29,10 +29,12 @@
 #include <chrono>
 #include <sstream>
 
+#include <android-base/file.h>
 #include <android-base/logging.h>
 #include <android-base/parseint.h>
 #include <android-base/properties.h>
 #include <android-base/strings.h>
+#include <fs_mgr/file_wait.h>
 #include <snapuserd/snapuserd_client.h>
 
 namespace android {
@@ -279,5 +281,42 @@
     return response == "success";
 }
 
+std::string SnapuserdClient::GetDaemonAliveIndicatorPath() {
+    return "/metadata/ota/" + std::string(kDaemonAliveIndicator);
+}
+
+bool SnapuserdClient::IsTransitionedDaemonReady() {
+    if (!android::fs_mgr::WaitForFile(GetDaemonAliveIndicatorPath(), 10s)) {
+        LOG(ERROR) << "Timed out waiting for daemon indicator path: "
+                   << GetDaemonAliveIndicatorPath();
+        return false;
+    }
+
+    return true;
+}
+
+bool SnapuserdClient::RemoveTransitionedDaemonIndicator() {
+    std::string error;
+    std::string filePath = GetDaemonAliveIndicatorPath();
+    if (!android::base::RemoveFileIfExists(filePath, &error)) {
+        LOG(ERROR) << "Failed to remove DaemonAliveIndicatorPath - error: " << error;
+        return false;
+    }
+
+    if (!android::fs_mgr::WaitForFileDeleted(filePath, 5s)) {
+        LOG(ERROR) << "Timed out waiting for " << filePath << " to unlink";
+        return false;
+    }
+
+    return true;
+}
+
+void SnapuserdClient::NotifyTransitionDaemonIsReady() {
+    if (!android::base::WriteStringToFile("1", GetDaemonAliveIndicatorPath())) {
+        PLOG(ERROR) << "Unable to write daemon alive indicator path: "
+                    << GetDaemonAliveIndicatorPath();
+    }
+}
+
 }  // namespace snapshot
 }  // namespace android
diff --git a/fs_mgr/libsnapshot/snapuserd/snapuserd_daemon.cpp b/fs_mgr/libsnapshot/snapuserd/snapuserd_daemon.cpp
index 2f7775c..bfe93eb 100644
--- a/fs_mgr/libsnapshot/snapuserd/snapuserd_daemon.cpp
+++ b/fs_mgr/libsnapshot/snapuserd/snapuserd_daemon.cpp
@@ -119,6 +119,12 @@
         }
     }
 
+    // We reach this point only during selinux transition during device boot.
+    // At this point, all threads are spin up and are ready to serve the I/O
+    // requests for dm-user. Lets inform init.
+    auto client = std::make_unique<SnapuserdClient>();
+    client->NotifyTransitionDaemonIsReady();
+
     // Skip the accept() call to avoid spurious log spam. The server will still
     // run until all handlers have completed.
     return user_server_.WaitForSocket();
diff --git a/init/snapuserd_transition.cpp b/init/snapuserd_transition.cpp
index 6972f30..3a9ff5b 100644
--- a/init/snapuserd_transition.cpp
+++ b/init/snapuserd_transition.cpp
@@ -112,6 +112,10 @@
 
     setenv(kSnapuserdFirstStagePidVar, std::to_string(pid).c_str(), 1);
 
+    if (!client->RemoveTransitionedDaemonIndicator()) {
+        LOG(ERROR) << "RemoveTransitionedDaemonIndicator failed";
+    }
+
     LOG(INFO) << "Relaunched snapuserd with pid: " << pid;
 }
 
@@ -263,6 +267,19 @@
  * we may see audit logs.
  */
 bool SnapuserdSelinuxHelper::TestSnapuserdIsReady() {
+    // Wait for the daemon to be fully up. Daemon will write to path
+    // /metadata/ota/daemon-alive-indicator only when all the threads
+    // are ready and attached to dm-user.
+    //
+    // This check will fail for GRF devices with vendor on Android S.
+    // snapuserd binary from Android S won't be able to communicate
+    // and hence, we will fallback and issue I/O to verify
+    // the presence of daemon.
+    auto client = std::make_unique<SnapuserdClient>();
+    if (!client->IsTransitionedDaemonReady()) {
+        LOG(ERROR) << "IsTransitionedDaemonReady failed";
+    }
+
     std::string dev = "/dev/block/mapper/system"s + fs_mgr_get_slot_suffix();
     android::base::unique_fd fd(open(dev.c_str(), O_RDONLY | O_DIRECT));
     if (fd < 0) {