diff --git a/src/connectedk8s/HISTORY.rst b/src/connectedk8s/HISTORY.rst
index cb52dbae41f..0db01336f9c 100644
--- a/src/connectedk8s/HISTORY.rst
+++ b/src/connectedk8s/HISTORY.rst
@@ -5,7 +5,7 @@ Release History
 
 0.2.8
 ++++++
-* Added checks for proxy
+* Added checks for proxy and added disable-proxy
 * Updated config dataplane endpoint to support other clouds
 
 0.2.7
diff --git a/src/connectedk8s/azext_connectedk8s/_constants.py b/src/connectedk8s/azext_connectedk8s/_constants.py
index b0d4c1388cc..e1b8bba6980 100644
--- a/src/connectedk8s/azext_connectedk8s/_constants.py
+++ b/src/connectedk8s/azext_connectedk8s/_constants.py
@@ -50,3 +50,5 @@
 Kubeconfig_Failed_To_Load_Fault_Type = "failed-to-load-kubeconfig-file"
 Proxy_Cert_Path_Does_Not_Exist_Fault_Type = 'proxy-cert-path-does-not-exist-error'
 Proxy_Cert_Path_Does_Not_Exist_Error = 'Proxy cert path {} does not exist. Please check the path provided'
+No_Param_Error = 'No parmeters were specified with update command. Please run az connectedk8s update --help to check parameters available for update'
+EnableProxy_Conflict_Error = 'Conflict detected: --disable-proxy can not be set with --https-proxy, --http-proxy, --proxy-skip-range and --proxy-cert at the same time. Please run az connectedk8s update --help for more information about the parameters'
diff --git a/src/connectedk8s/azext_connectedk8s/_help.py b/src/connectedk8s/azext_connectedk8s/_help.py
index 602ace31de6..d547bf08958 100644
--- a/src/connectedk8s/azext_connectedk8s/_help.py
+++ b/src/connectedk8s/azext_connectedk8s/_help.py
@@ -33,6 +33,8 @@
     examples:
     - name: Update proxy values for the agents
       text: az connectedk8s update -g resourceGroupName -n connectedClusterName  --proxy-cert /path/to/crt --proxy-https https://proxy-url --proxy-http http://proxy-url --proxy-skip-range excludedIP,excludedCIDR,exampleCIDRfollowed,10.0.0.0/24
+    - name: Disable proxy settings for agents
+      text: az connectedk8s update --disable-proxy
 """
 
 helps['connectedk8s list'] = """
diff --git a/src/connectedk8s/azext_connectedk8s/_params.py b/src/connectedk8s/azext_connectedk8s/_params.py
index cf0c51f3351..414e4da8eff 100644
--- a/src/connectedk8s/azext_connectedk8s/_params.py
+++ b/src/connectedk8s/azext_connectedk8s/_params.py
@@ -33,6 +33,7 @@ def load_arguments(self, _):
         c.argument('http_proxy', options_list=['--proxy-http'], help='Http proxy URL to be used.')
         c.argument('no_proxy', options_list=['--proxy-skip-range'], help='List of URLs/CIDRs for which proxy should not to be used.')
         c.argument('proxy_cert', options_list=['--proxy-cert'], type=file_type, completer=FilesCompleter(), help='Path to the certificate file for proxy')
+        c.argument('disable_proxy', options_list=['--disable-proxy'], action='store_true', help='Disables proxy settings for agents')
 
     with self.argument_context('connectedk8s list') as c:
         pass
diff --git a/src/connectedk8s/azext_connectedk8s/custom.py b/src/connectedk8s/azext_connectedk8s/custom.py
index 28d88977375..5bccb5afcb4 100644
--- a/src/connectedk8s/azext_connectedk8s/custom.py
+++ b/src/connectedk8s/azext_connectedk8s/custom.py
@@ -623,6 +623,8 @@ def helm_install_release(chart_path, subscription_id, kubernetes_distro, resourc
         cmd_helm_install.extend(["--set", "global.noProxy={}".format(no_proxy)])
     if proxy_cert:
         cmd_helm_install.extend(["--set-file", "global.proxyCert={}".format(proxy_cert)])
+    if https_proxy or http_proxy or no_proxy:
+        cmd_helm_install.extend(["--set", "global.isProxyEnabled={}".format(True)])
     if kube_config:
         cmd_helm_install.extend(["--kubeconfig", kube_config])
     if kube_context:
@@ -708,7 +710,7 @@ def update_connectedk8s(cmd, instance, tags=None):
 
 
 def update_agents(cmd, client, resource_group_name, cluster_name, https_proxy="", http_proxy="", no_proxy="", proxy_cert="",
-                  kube_config=None, kube_context=None, no_wait=False):
+                  disable_proxy=False, kube_config=None, kube_context=None, no_wait=False):
     logger.warning("Ensure that you have the latest helm version installed before proceeding.")
     logger.warning("This operation might take a while...\n")
 
@@ -736,6 +738,12 @@ def update_agents(cmd, client, resource_group_name, cluster_name, https_proxy=""
 
     proxy_cert = proxy_cert.replace('\\', r'\\\\')
 
+    if https_proxy == "" and http_proxy == "" and no_proxy == "" and proxy_cert == "" and not disable_proxy:
+        raise CLIError(consts.No_Param_Error)
+
+    if (https_proxy or http_proxy or no_proxy or proxy_cert) and disable_proxy:
+        raise CLIError(consts.EnableProxy_Conflict_Error)
+
     # Checking whether optional extra values file has been provided.
     values_file_provided = False
     values_file = os.getenv('HELMVALUESPATH')
@@ -837,6 +845,10 @@ def update_agents(cmd, client, resource_group_name, cluster_name, https_proxy=""
         cmd_helm_upgrade.extend(["--set", "global.httpProxy={}".format(http_proxy)])
     if no_proxy:
         cmd_helm_upgrade.extend(["--set", "global.noProxy={}".format(no_proxy)])
+    if https_proxy or http_proxy or no_proxy:
+        cmd_helm_upgrade.extend(["--set", "global.isProxyEnabled={}".format(True)])
+    if disable_proxy:
+        cmd_helm_upgrade.extend(["--set", "global.isProxyEnabled={}".format(False)])
     if proxy_cert:
         cmd_helm_upgrade.extend(["--set-file", "global.proxyCert={}".format(proxy_cert)])
     if kube_config: