diff --git a/NEWS b/NEWS
index 3e392ff08b5a..b23977a9316d 100644
--- a/NEWS
+++ b/NEWS
@@ -38,6 +38,9 @@ Post v24.03.0
     ability to disable "VXLAN mode" to extend available tunnel IDs space for
     datapaths from 4095 to 16711680.  For more details see man ovn-nb(5) for
     mentioned option.
+  - Add "external_ids:ovn-encap-ip-default" config for ovn-controller to
+    determine the default encap IP when there are multiple encap IPs
+    configured.
 
 OVN v24.03.0 - 01 Mar 2024
 --------------------------
diff --git a/controller/binding.c b/controller/binding.c
index b7e7f48749b8..146b03248f14 100644
--- a/controller/binding.c
+++ b/controller/binding.c
@@ -520,20 +520,21 @@ static struct sbrec_encap *
 sbrec_get_port_encap(const struct sbrec_chassis *chassis_rec,
                      const struct ovsrec_interface *iface_rec)
 {
-
-    if (!iface_rec) {
+    if (chassis_rec->n_encaps < 2) {
         return NULL;
     }
 
-    const char *encap_ip = smap_get(&iface_rec->external_ids, "encap-ip");
-    if (!encap_ip) {
-        return NULL;
+    const char *encap_ip = NULL;
+    if (iface_rec) {
+        encap_ip = smap_get(&iface_rec->external_ids, "encap-ip");
     }
 
     struct sbrec_encap *best_encap = NULL;
     uint32_t best_type = 0;
     for (int i = 0; i < chassis_rec->n_encaps; i++) {
-        if (!strcmp(chassis_rec->encaps[i]->ip, encap_ip)) {
+        if ((encap_ip && !strcmp(chassis_rec->encaps[i]->ip, encap_ip)) ||
+            (!encap_ip && smap_get_bool(&chassis_rec->encaps[i]->options,
+                                        "is_default", false))) {
             uint32_t tun_type = get_tunnel_type(chassis_rec->encaps[i]->type);
             if (tun_type > best_type) {
                 best_type = tun_type;
diff --git a/controller/chassis.c b/controller/chassis.c
index 4942ba281d66..7fe38efd1159 100644
--- a/controller/chassis.c
+++ b/controller/chassis.c
@@ -63,6 +63,8 @@ struct ovs_chassis_cfg {
     struct sset encap_type_set;
     /* Set of encap IPs parsed from the 'ovn-encap-ip' external-id. */
     struct sset encap_ip_set;
+    /* Default encap IP when there are two or more encap IPs. Optional. */
+    const char *encap_ip_default;
     /* Interface type list formatted in the OVN-SB Chassis required format. */
     struct ds iface_types;
     /* Is this chassis an interconnection gateway. */
@@ -281,6 +283,7 @@ chassis_parse_ovs_config(const struct ovsrec_open_vswitch_table *ovs_table,
                          const struct ovsrec_bridge *br_int,
                          struct ovs_chassis_cfg *ovs_cfg)
 {
+    static struct vlog_rate_limit rl = VLOG_RATE_LIMIT_INIT(1, 5);
     const struct ovsrec_open_vswitch *cfg =
         ovsrec_open_vswitch_table_first(ovs_table);
 
@@ -298,7 +301,6 @@ chassis_parse_ovs_config(const struct ovsrec_open_vswitch_table *ovs_table,
         get_chassis_external_id_value(&cfg->external_ids, chassis_id,
                                       "ovn-encap-ip", NULL);
     if (!encap_type || !encap_ips) {
-        static struct vlog_rate_limit rl = VLOG_RATE_LIMIT_INIT(1, 5);
         VLOG_INFO_RL(&rl, "Need to specify an encap type and ip");
         return false;
     }
@@ -333,6 +335,16 @@ chassis_parse_ovs_config(const struct ovsrec_open_vswitch_table *ovs_table,
      * multiple NICs and is assigning SR-IOV VFs to a guest (as logical ports).
      */
     chassis_parse_ovs_encap_ip(encap_ips, &ovs_cfg->encap_ip_set);
+    const char *encap_ip_default =
+        get_chassis_external_id_value(&cfg->external_ids, chassis_id,
+                                      "ovn-encap-ip-default", NULL);
+    if (encap_ip_default &&
+        !sset_contains(&ovs_cfg->encap_ip_set, encap_ip_default)) {
+        VLOG_INFO_RL(&rl, "ovn-encap-ip-default (%s) must be one of the IPs "
+                     "in ovn-encap-ip.", encap_ip_default);
+        return false;
+    }
+    ovs_cfg->encap_ip_default = encap_ip_default;
 
     chassis_parse_ovs_iface_types(cfg->iface_types, cfg->n_iface_types,
                                   &ovs_cfg->iface_types);
@@ -534,6 +546,7 @@ chassis_other_config_changed(const struct ovs_chassis_cfg *ovs_cfg,
 static bool
 chassis_tunnels_changed(const struct sset *encap_type_set,
                         const struct sset *encap_ip_set,
+                        const char *encap_ip_default,
                         const char *encap_csum,
                         const struct sbrec_chassis *chassis_rec)
 {
@@ -562,6 +575,19 @@ chassis_tunnels_changed(const struct sset *encap_type_set,
             changed = true;
             break;
         }
+
+        if (smap_get_bool(&chassis_rec->encaps[i]->options,
+                          "is_default", false)) {
+            if (!encap_ip_default || strcmp(encap_ip_default,
+                                            chassis_rec->encaps[i]->ip)) {
+                changed = true;
+                break;
+            }
+        } else if (encap_ip_default && !strcmp(encap_ip_default,
+                                               chassis_rec->encaps[i]->ip)) {
+            changed = true;
+            break;
+        }
     }
 
     if (!changed) {
@@ -593,6 +619,7 @@ static struct sbrec_encap **
 chassis_build_encaps(struct ovsdb_idl_txn *ovnsb_idl_txn,
                      const struct sset *encap_type_set,
                      const struct sset *encap_ip_set,
+                     const char *encap_ip_default,
                      const char *chassis_id,
                      const char *encap_csum,
                      size_t *n_encap)
@@ -613,7 +640,15 @@ chassis_build_encaps(struct ovsdb_idl_txn *ovnsb_idl_txn,
 
             sbrec_encap_set_type(encap, encap_type);
             sbrec_encap_set_ip(encap, encap_ip);
-            sbrec_encap_set_options(encap, &options);
+            if (encap_ip_default && !strcmp(encap_ip_default, encap_ip)) {
+                struct smap _options;
+                smap_clone(&_options, &options);
+                smap_add(&_options, "is_default", "true");
+                sbrec_encap_set_options(encap, &_options);
+                smap_destroy(&_options);
+            } else {
+                sbrec_encap_set_options(encap, &options);
+            }
             sbrec_encap_set_chassis_name(encap, chassis_id);
 
             encaps[tunnel_count] = encap;
@@ -748,7 +783,9 @@ chassis_update(const struct sbrec_chassis *chassis_rec,
     /* If any of the encaps should change, update them. */
     bool tunnels_changed =
         chassis_tunnels_changed(&ovs_cfg->encap_type_set,
-                                &ovs_cfg->encap_ip_set, ovs_cfg->encap_csum,
+                                &ovs_cfg->encap_ip_set,
+                                ovs_cfg->encap_ip_default,
+                                ovs_cfg->encap_csum,
                                 chassis_rec);
     if (!tunnels_changed) {
         return updated;
@@ -759,7 +796,8 @@ chassis_update(const struct sbrec_chassis *chassis_rec,
 
     encaps =
         chassis_build_encaps(ovnsb_idl_txn, &ovs_cfg->encap_type_set,
-                             &ovs_cfg->encap_ip_set, chassis_id,
+                             &ovs_cfg->encap_ip_set,
+                             ovs_cfg->encap_ip_default, chassis_id,
                              ovs_cfg->encap_csum, &n_encap);
     sbrec_chassis_set_encaps(chassis_rec, encaps, n_encap);
     free(encaps);
diff --git a/controller/ovn-controller.8.xml b/controller/ovn-controller.8.xml
index 6dad00eb146f..89f08843fcbc 100644
--- a/controller/ovn-controller.8.xml
+++ b/controller/ovn-controller.8.xml
@@ -204,6 +204,12 @@
         </p>
       </dd>
 
+      <dt><code>external_ids:ovn-encap-ip-default</code></dt>
+      <dd>
+        When <code>ovn-encap-ip</code> contains multiple IPs, this field
+        indicates the default one.
+      </dd>
+
       <dt><code>external_ids:ovn-encap-df_default</code></dt>
       <dd>
         indicates the DF flag handling of the encapulation. Set to
diff --git a/ovn-sb.xml b/ovn-sb.xml
index 73a1be5ed9b8..66d03bd7cdec 100644
--- a/ovn-sb.xml
+++ b/ovn-sb.xml
@@ -562,6 +562,16 @@
       </p>
     </column>
 
+    <column name="options" key="is_default" type='{"type": "boolean"}'>
+      <p>
+        When there are multiple encaps for a chassis with different IPs, this
+        option indicates if the encap is the default one that matches the IP in
+        <ref table="Open_vSwitch" column="external_ids:ovn-encap-ip-default"/>
+        column of the Open_vSwitch database's <ref table="Open_vSwitch"
+        db="Open_vSwitch"/> table.
+      </p>
+    </column>
+
     <column name="ip">
       The IPv4 address of the encapsulation tunnel endpoint.
     </column>
diff --git a/tests/ovn.at b/tests/ovn.at
index adc7cb2c8fc6..8250589814aa 100644
--- a/tests/ovn.at
+++ b/tests/ovn.at
@@ -30133,8 +30133,21 @@ check_packet_tunnel() {
     local dst_mac=f0:00:00:00:88:01 # lrp-ls1's MAC
     local src_ip=$(vif_to_ip vif$src)
     local dst_ip=$(vif_to_ip vif$dst)
-    local local_encap_ip=192.168.0.$src
-    local remote_encap_ip=192.168.0.$dst
+
+    local local_encap_ip
+    if test -n "$3"; then
+        local_encap_ip=$3
+    else
+        local_encap_ip=192.168.0.$src
+    fi
+
+    local remote_encap_ip
+    if test -n "$4"; then
+        remote_encap_ip=$4
+    else
+        remote_encap_ip=192.168.0.$dst
+    fi
+
     local packet=$(fmt_pkt "Ether(dst='${dst_mac}', src='${src_mac}')/ \
                             IP(dst='${dst_ip}', src='${src_ip}')/ \
                             ICMP(type=8)")
@@ -30151,6 +30164,26 @@ for i in 1 2; do
     done
 done
 
+# Set default encap-ip and remove VIF's encap-ip settings. Packets should go
+# through default encap-ip.
+
+for i in 1 2; do
+    as hv$i
+    check ovs-vsctl set open . external_ids:ovn-encap-ip-default=192.168.0.${i}2
+
+    for j in 1 2; do
+        check ovs-vsctl remove Interface vif$i$j external_ids encap-ip
+    done
+done
+
+check ovn-nbctl --wait=hv sync
+
+for i in 1 2; do
+    for j in 1 2; do
+        check_packet_tunnel 1$i 2$j 192.168.0.12 192.168.0.22
+    done
+done
+
 OVN_CLEANUP([hv1],[hv2])
 AT_CLEANUP
 ])
