diff --git a/drivers/misc/habanalabs/common/device.c b/drivers/misc/habanalabs/common/device.c
index 37ce38d9a1a7..ff4cbde289c0 100644
--- a/drivers/misc/habanalabs/common/device.c
+++ b/drivers/misc/habanalabs/common/device.c
@@ -86,7 +86,7 @@ static void hpriv_release(struct kref *ref)
 
 	if ((hdev->reset_if_device_not_idle && !device_is_idle)
 			|| hdev->reset_upon_device_release)
-		hl_device_reset(hdev, 0);
+		hl_device_reset(hdev, HL_RESET_DEVICE_RELEASE);
 }
 
 void hl_hpriv_get(struct hl_fpriv *hpriv)
@@ -885,7 +885,7 @@ static void device_disable_open_processes(struct hl_device *hdev)
 int hl_device_reset(struct hl_device *hdev, u32 flags)
 {
 	u64 idle_mask[HL_BUSY_ENGINES_MASK_EXT_SIZE] = {0};
-	bool hard_reset, from_hard_reset_thread;
+	bool hard_reset, from_hard_reset_thread, hard_instead_soft = false;
 	int i, rc;
 
 	if (!hdev->init_done) {
@@ -897,11 +897,28 @@ int hl_device_reset(struct hl_device *hdev, u32 flags)
 	hard_reset = (flags & HL_RESET_HARD) != 0;
 	from_hard_reset_thread = (flags & HL_RESET_FROM_RESET_THREAD) != 0;
 
-	if ((!hard_reset) && (!hdev->supports_soft_reset)) {
-		dev_dbg(hdev->dev, "Doing hard-reset instead of soft-reset\n");
+	if (!hard_reset && !hdev->supports_soft_reset) {
+		hard_instead_soft = true;
 		hard_reset = true;
 	}
 
+	if (hdev->reset_upon_device_release &&
+			(flags & HL_RESET_DEVICE_RELEASE)) {
+		dev_dbg(hdev->dev,
+			"Perform %s-reset upon device release\n",
+			hard_reset ? "hard" : "soft");
+		goto do_reset;
+	}
+
+	if (!hard_reset && !hdev->allow_external_soft_reset) {
+		hard_instead_soft = true;
+		hard_reset = true;
+	}
+
+	if (hard_instead_soft)
+		dev_dbg(hdev->dev, "Doing hard-reset instead of soft-reset\n");
+
+do_reset:
 	/* Re-entry of reset thread */
 	if (from_hard_reset_thread && hdev->process_kill_trial_cnt)
 		goto kill_processes;
diff --git a/drivers/misc/habanalabs/common/habanalabs.h b/drivers/misc/habanalabs/common/habanalabs.h
index 09b89fdeba0b..fad112a01009 100644
--- a/drivers/misc/habanalabs/common/habanalabs.h
+++ b/drivers/misc/habanalabs/common/habanalabs.h
@@ -119,11 +119,15 @@ enum hl_mmu_page_table_location {
  *
  * - HL_RESET_TDR
  *       Set if reset is due to TDR
+ *
+ * - HL_RESET_DEVICE_RELEASE
+ *       Set if reset is due to device release
  */
 #define HL_RESET_HARD			(1 << 0)
 #define HL_RESET_FROM_RESET_THREAD	(1 << 1)
 #define HL_RESET_HEARTBEAT		(1 << 2)
 #define HL_RESET_TDR			(1 << 3)
+#define HL_RESET_DEVICE_RELEASE		(1 << 4)
 
 #define HL_MAX_SOBS_PER_MONITOR	8
 
@@ -2181,6 +2185,8 @@ struct hl_mmu_funcs {
  * @collective_mon_idx: helper index for collective initialization
  * @supports_coresight: is CoreSight supported.
  * @supports_soft_reset: is soft reset supported.
+ * @allow_external_soft_reset: true if soft reset initiated by user or TDR is
+ *                             allowed.
  * @supports_cb_mapping: is mapping a CB to the device's MMU supported.
  * @needs_reset: true if reset_on_lockup is false and device should be reset
  *               due to lockup.
@@ -2301,6 +2307,7 @@ struct hl_device {
 	u8				collective_mon_idx;
 	u8				supports_coresight;
 	u8				supports_soft_reset;
+	u8				allow_external_soft_reset;
 	u8				supports_cb_mapping;
 	u8				needs_reset;
 	u8				process_kill_trial_cnt;
diff --git a/drivers/misc/habanalabs/common/sysfs.c b/drivers/misc/habanalabs/common/sysfs.c
index c9f649b31e3a..db72df282ef8 100644
--- a/drivers/misc/habanalabs/common/sysfs.c
+++ b/drivers/misc/habanalabs/common/sysfs.c
@@ -208,7 +208,7 @@ static ssize_t soft_reset_store(struct device *dev,
 		goto out;
 	}
 
-	if (!hdev->supports_soft_reset) {
+	if (!hdev->allow_external_soft_reset) {
 		dev_err(hdev->dev, "Device does not support soft-reset\n");
 		goto out;
 	}
diff --git a/drivers/misc/habanalabs/goya/goya.c b/drivers/misc/habanalabs/goya/goya.c
index 5a837c0b4d76..06f5f1439e69 100644
--- a/drivers/misc/habanalabs/goya/goya.c
+++ b/drivers/misc/habanalabs/goya/goya.c
@@ -954,6 +954,7 @@ static int goya_sw_init(struct hl_device *hdev)
 	spin_lock_init(&goya->hw_queues_lock);
 	hdev->supports_coresight = true;
 	hdev->supports_soft_reset = true;
+	hdev->allow_external_soft_reset = true;
 
 	goya_set_pci_memory_regions(hdev);