diff --git a/cloudinit/util.py b/cloudinit/util.py
index 1fadd196291..ae3311e3e28 100644
--- a/cloudinit/util.py
+++ b/cloudinit/util.py
@@ -1887,7 +1887,12 @@ def is_link(path):
 def sym_link(source, link, force=False):
     LOG.debug("Creating symbolic link from %r => %r", link, source)
     if force and os.path.lexists(link):
-        del_file(link)
+        # Provide atomic update of symlink to avoid races with status --wait
+        # LP: #1962150
+        tmp_link = os.path.join(os.path.dirname(link), "tmp" + rand_str(8))
+        os.symlink(source, tmp_link)
+        os.replace(tmp_link, link)
+        return
     os.symlink(source, link)
 
 
diff --git a/tests/unittests/test_util.py b/tests/unittests/test_util.py
index 3f3079b04e7..db6e2bc4be6 100644
--- a/tests/unittests/test_util.py
+++ b/tests/unittests/test_util.py
@@ -376,13 +376,16 @@ def test_sym_link_source_exists(self):
         tmpd = self.tmp_dir()
         link = self.tmp_path("link", tmpd)
         target = self.tmp_path("target", tmpd)
+        target2 = self.tmp_path("target2", tmpd)
         util.write_file(target, "hello")
+        util.write_file(target2, "hello2")
 
         util.sym_link(target, link)
         self.assertTrue(os.path.exists(link))
 
-        util.sym_link(target, link, force=True)
+        util.sym_link(target2, link, force=True)
         self.assertTrue(os.path.exists(link))
+        self.assertEqual("hello2", util.load_file(link))
 
     def test_sym_link_dangling_link(self):
         tmpd = self.tmp_dir()