diff --git a/gns3server/handlers/iou_handler.py b/gns3server/handlers/iou_handler.py
index 9b72da8f..05d34614 100644
--- a/gns3server/handlers/iou_handler.py
+++ b/gns3server/handlers/iou_handler.py
@@ -62,7 +62,7 @@ class IOUHandler:
                                       ram=request.json.get("ram"),
                                       nvram=request.json.get("nvram"),
                                       l1_keepalives=request.json.get("l1_keepalives"),
-                                      initial_config=request.json.get("initial_config")
+                                      initial_config=request.json.get("initial_config_content")
                                       )
         vm.path = request.json.get("path", vm.path)
         response.set_status(201)
@@ -116,7 +116,7 @@ class IOUHandler:
         vm.ram = request.json.get("ram", vm.ram)
         vm.nvram = request.json.get("nvram", vm.nvram)
         vm.l1_keepalives = request.json.get("l1_keepalives", vm.l1_keepalives)
-        vm.initial_config = request.json.get("initial_config", vm.initial_config)
+        vm.initial_config = request.json.get("initial_config_content", vm.initial_config)
 
         response.json(vm)
 
diff --git a/gns3server/modules/iou/iou_vm.py b/gns3server/modules/iou/iou_vm.py
index 04c3afdd..29b8f21c 100644
--- a/gns3server/modules/iou/iou_vm.py
+++ b/gns3server/modules/iou/iou_vm.py
@@ -200,6 +200,7 @@ class IOUVM(BaseVM):
                 "ram": self._ram,
                 "nvram": self._nvram,
                 "l1_keepalives": self._l1_keepalives,
+                "initial_config": self.relative_initial_config_file
                 }
 
     @property
@@ -890,7 +891,7 @@ class IOUVM(BaseVM):
 
         path = os.path.join(self.working_dir, 'initial-config.cfg')
         if os.path.exists(path):
-            return path.replace(self.project.path, "")[1:]
+            return 'initial-config.cfg'
         else:
             return None
 
diff --git a/gns3server/schemas/iou.py b/gns3server/schemas/iou.py
index 9e846f59..e495af5e 100644
--- a/gns3server/schemas/iou.py
+++ b/gns3server/schemas/iou.py
@@ -66,7 +66,7 @@ IOU_CREATE_SCHEMA = {
             "description": "Always up ethernet interface",
             "type": ["boolean", "null"]
         },
-        "initial_config": {
+        "initial_config_content": {
             "description": "Initial configuration of the IOU",
             "type": ["string", "null"]
         }
@@ -115,7 +115,7 @@ IOU_UPDATE_SCHEMA = {
             "description": "Always up ethernet interface",
             "type": ["boolean", "null"]
         },
-        "initial_config": {
+        "initial_config_content": {
             "description": "Initial configuration of the IOU",
             "type": ["string", "null"]
         }
@@ -177,9 +177,13 @@ IOU_OBJECT_SCHEMA = {
             "description": "Always up ethernet interface",
             "type": "boolean"
         },
+        "initial_config": {
+            "description": "Path of the initial config content relative to project directory",
+            "type": ["string", "null"]
+        }
     },
     "additionalProperties": False,
-    "required": ["name", "vm_id", "console", "project_id", "path", "serial_adapters", "ethernet_adapters", "ram", "nvram", "l1_keepalives"]
+    "required": ["name", "vm_id", "console", "project_id", "path", "serial_adapters", "ethernet_adapters", "ram", "nvram", "l1_keepalives", "initial_config"]
 }
 
 IOU_NIO_SCHEMA = {
diff --git a/tests/api/test_iou.py b/tests/api/test_iou.py
index 2fe63861..e112bd94 100644
--- a/tests/api/test_iou.py
+++ b/tests/api/test_iou.py
@@ -72,7 +72,7 @@ def test_iou_create_with_params(server, project, base_params):
     params["serial_adapters"] = 4
     params["ethernet_adapters"] = 0
     params["l1_keepalives"] = True
-    params["initial_config"] = "hostname test"
+    params["initial_config_content"] = "hostname test"
 
     response = server.post("/projects/{project_id}/iou/vms".format(project_id=project.id), params, example=True)
     assert response.status == 201
@@ -84,8 +84,9 @@ def test_iou_create_with_params(server, project, base_params):
     assert response.json["ram"] == 1024
     assert response.json["nvram"] == 512
     assert response.json["l1_keepalives"] is True
+    assert "initial-config.cfg" in response.json["initial_config"]
     with open(initial_config_file(project, response.json)) as f:
-        assert f.read() == params["initial_config"]
+        assert f.read() == params["initial_config_content"]
 
 
 def test_iou_get(server, project, vm):
@@ -138,7 +139,7 @@ def test_iou_update(server, vm, tmpdir, free_console_port, project):
         "ethernet_adapters": 4,
         "serial_adapters": 0,
         "l1_keepalives": True,
-        "initial_config": "hostname test"
+        "initial_config_content": "hostname test"
     }
     response = server.put("/projects/{project_id}/iou/vms/{vm_id}".format(project_id=vm["project_id"], vm_id=vm["vm_id"]), params)
     assert response.status == 200
@@ -149,6 +150,7 @@ def test_iou_update(server, vm, tmpdir, free_console_port, project):
     assert response.json["ram"] == 512
     assert response.json["nvram"] == 2048
     assert response.json["l1_keepalives"] is True
+    assert "initial-config.cfg" in response.json["initial_config"]
     with open(initial_config_file(project, response.json)) as f:
         assert f.read() == "hostname test"
 
@@ -244,4 +246,4 @@ def test_get_initial_config_with_config_file(server, project, vm):
     response = server.get("/projects/{project_id}/iou/vms/{vm_id}/initial_config".format(project_id=vm["project_id"], vm_id=vm["vm_id"]), example=True)
     assert response.status == 200
     assert response.json["content"] == "TEST"
-    assert response.json["path"] == "project-files/iou/{vm_id}/initial-config.cfg".format(vm_id=vm["vm_id"])
+    assert response.json["path"] == "initial-config.cfg"