diff --git a/src/aks-preview/HISTORY.rst b/src/aks-preview/HISTORY.rst
index b86f428bfed..160d16426ed 100644
--- a/src/aks-preview/HISTORY.rst
+++ b/src/aks-preview/HISTORY.rst
@@ -9,6 +9,10 @@ If there is no rush to release a new version, please just add a description of t
 
 To release a new version, please select a new version number (usually plus 1 to last patch version, X.Y.Z -> Major.Minor.Patch, more details in `\doc <https://semver.org/>`_), and then add a new section named as the new version number in this file, the content should include the new modifications and everything from the *Pending* section. Finally, update the `VERSION` variable in `setup.py` with this new version number.
 
+13.0.0b3
++++++++
+* `az aks create`: Update outbound type selection logic for automatic cluster when customer brings BYO Vnet.
+
 13.0.0b2
 +++++++
 * `az aks create/update`: Update advanced container networking service (acns) with 2024-09-02-preview API version enablement.
diff --git a/src/aks-preview/azext_aks_preview/managed_cluster_decorator.py b/src/aks-preview/azext_aks_preview/managed_cluster_decorator.py
index 268b9e89a96..5453a779da9 100644
--- a/src/aks-preview/azext_aks_preview/managed_cluster_decorator.py
+++ b/src/aks-preview/azext_aks_preview/managed_cluster_decorator.py
@@ -433,8 +433,9 @@ def _get_outbound_type(
         ):
             outbound_type = CONST_OUTBOUND_TYPE_LOAD_BALANCER
             skuName = self.get_sku_name()
-            if skuName is not None and skuName == CONST_MANAGED_CLUSTER_SKU_NAME_AUTOMATIC:
-                # outbound_type of Automatic SKU should be ManagedNATGateway if not provided.
+            isVnetSubnetIdEmpty = self.get_vnet_subnet_id() in ["", None]
+            if skuName is not None and skuName == CONST_MANAGED_CLUSTER_SKU_NAME_AUTOMATIC and isVnetSubnetIdEmpty:
+                # outbound_type of Automatic SKU should be ManagedNATGateway if no subnet id provided.
                 outbound_type = CONST_OUTBOUND_TYPE_MANAGED_NAT_GATEWAY
 
         # validation
@@ -1425,6 +1426,7 @@ def _get_apiserver_subnet_id(self, enable_validation: bool = False) -> Union[str
                     enable_apiserver_vnet_integration is None or
                     enable_apiserver_vnet_integration is False
                 )
+                and self.get_sku_name() != CONST_MANAGED_CLUSTER_SKU_NAME_AUTOMATIC
             ):
                 raise RequiredArgumentMissingError(
                     '"--apiserver-subnet-id" requires "--enable-apiserver-vnet-integration".')
@@ -2923,6 +2925,9 @@ def set_up_api_server_access_profile(self, mc: ManagedCluster) -> ManagedCluster
                 mc.api_server_access_profile = self.models.ManagedClusterAPIServerAccessProfile()
             mc.api_server_access_profile.enable_vnet_integration = True
         if self.context.get_apiserver_subnet_id():
+            if mc.api_server_access_profile is None:
+                # pylint: disable=no-member
+                mc.api_server_access_profile = self.models.ManagedClusterAPIServerAccessProfile()
             mc.api_server_access_profile.subnet_id = self.context.get_apiserver_subnet_id()
 
         return mc
diff --git a/src/aks-preview/azext_aks_preview/tests/latest/test_managed_cluster_decorator.py b/src/aks-preview/azext_aks_preview/tests/latest/test_managed_cluster_decorator.py
index 61ba8d297a7..3461b8095f8 100644
--- a/src/aks-preview/azext_aks_preview/tests/latest/test_managed_cluster_decorator.py
+++ b/src/aks-preview/azext_aks_preview/tests/latest/test_managed_cluster_decorator.py
@@ -3958,6 +3958,7 @@ def test_get_outbound_type(self):
             self.models,
             decorator_mode=DecoratorMode.CREATE,
         )
+        self.create_attach_agentpool_context(ctx1)
         outbound_type_1 = ctx1._get_outbound_type(False, False, None)
         expect_outbound_type_1 = CONST_OUTBOUND_TYPE_MANAGED_NAT_GATEWAY
         self.assertEqual(outbound_type_1,expect_outbound_type_1)
@@ -3968,10 +3969,33 @@ def test_get_outbound_type(self):
             self.models,
             decorator_mode=DecoratorMode.CREATE,
         )
+        self.create_attach_agentpool_context(ctx2)
         outbound_type_2 = ctx2._get_outbound_type(False, False, None)
         expect_outbound_type_2 = CONST_OUTBOUND_TYPE_LOAD_BALANCER
         self.assertEqual(outbound_type_2,expect_outbound_type_2)
 
+        ctx3 = AKSPreviewManagedClusterContext(
+            self.cmd,
+            AKSManagedClusterParamDict({"sku": "automatic", "vnet_subnet_id": "/subscriptions/testid/resourceGroups/MockedResourceGroup/providers/Microsoft.Network/virtualNetworks/MockedNetworkId/subnets/MockedSubNetId"}),
+            self.models,
+            decorator_mode=DecoratorMode.CREATE,
+        )
+        self.create_attach_agentpool_context(ctx3)
+        outbound_type_3 = ctx3._get_outbound_type(False, False, None)
+        expect_outbound_type_3 = CONST_OUTBOUND_TYPE_LOAD_BALANCER
+        self.assertEqual(outbound_type_3,expect_outbound_type_3)
+
+        ctx4 = AKSPreviewManagedClusterContext(
+            self.cmd,
+            AKSManagedClusterParamDict({"sku": "automatic"}),
+            self.models,
+            decorator_mode=DecoratorMode.CREATE,
+        )
+        self.create_attach_agentpool_context(ctx4)
+        outbound_type_4 = ctx4._get_outbound_type(False, False, None)
+        expect_outbound_type_4 = CONST_OUTBOUND_TYPE_MANAGED_NAT_GATEWAY
+        self.assertEqual(outbound_type_4,expect_outbound_type_4)
+
 class AKSPreviewManagedClusterCreateDecoratorTestCase(unittest.TestCase):
     def setUp(self):
         # manually register CUSTOM_MGMT_AKS_PREVIEW
@@ -4266,6 +4290,30 @@ def test_set_up_api_server_access_profile(self):
         )
         self.assertEqual(dec_mc_3, ground_truth_mc_3)
 
+        dec_4 = AKSPreviewManagedClusterCreateDecorator(
+            self.cmd,
+            self.client,
+            {
+                "apiserver_subnet_id": apiserver_subnet_id,
+                "vnet_subnet_id": vnet_subnet_id,
+                "sku": "automatic",
+            },
+            CUSTOM_MGMT_AKS_PREVIEW,
+        )
+        mc_4 = self.models.ManagedCluster(location="test_location")
+        dec_4.context.attach_mc(mc_4)
+        dec_mc_4 = dec_4.set_up_api_server_access_profile(mc_4)
+        ground_truth_api_server_access_profile_4 = (
+            self.models.ManagedClusterAPIServerAccessProfile(
+                subnet_id=apiserver_subnet_id,
+            )
+        )
+        ground_truth_mc_4 = self.models.ManagedCluster(
+            location="test_location",
+            api_server_access_profile=ground_truth_api_server_access_profile_4,
+        )
+        self.assertEqual(dec_mc_4, ground_truth_mc_4)
+
     def test_build_gitops_addon_profile(self):
         # default
         dec_1 = AKSPreviewManagedClusterCreateDecorator(
diff --git a/src/aks-preview/setup.py b/src/aks-preview/setup.py
index 22cbea031b8..736c4785c8d 100644
--- a/src/aks-preview/setup.py
+++ b/src/aks-preview/setup.py
@@ -9,7 +9,7 @@
 
 from setuptools import setup, find_packages
 
-VERSION = "13.0.0b2"
+VERSION = "13.0.0b3"
 
 CLASSIFIERS = [
     "Development Status :: 4 - Beta",