diff --git a/management/server/network.go b/management/server/network.go
index e8c40242b79..c7df1041e55 100644
--- a/management/server/network.go
+++ b/management/server/network.go
@@ -6,6 +6,7 @@ import (
 	"sync"
 	"time"
 	"os"
+	"strconv"
 
 	"github.com/c-robinson/iplib"
 	"github.com/rs/xid"
@@ -113,30 +114,46 @@ func (n *Network) Copy() *Network {
 	}
 }
 
-// AllocatePeerIP pics an available IP from an net.IPNet.
-// This method considers already taken IPs and reuses IPs if there are gaps in takenIps
-// E.g. if ipNet=100.30.0.0/16 and takenIps=[100.30.0.1, 100.30.0.4] then the result would be 100.30.0.2 or 100.30.0.3
+
+// AllocatePeerIP picks an available IP from a net.IPNet.
+// If sequential IPs assigning is enabled, it assigns the smallest available IP address.
+// Otherwise, it assigns a random available IP address.
 func AllocatePeerIP(ipNet net.IPNet, takenIps []net.IP) (net.IP, error) {
-	takenIPMap := make(map[string]struct{})
-	takenIPMap[ipNet.IP.String()] = struct{}{}
-	for _, ip := range takenIps {
-		takenIPMap[ip.String()] = struct{}{}
-	}
+    takenIPMap := make(map[string]struct{})
+    takenIPMap[ipNet.IP.String()] = struct{}{}
+    for _, ip := range takenIps {
+        takenIPMap[ip.String()] = struct{}{}
+    }
 
-	ips, _ := generateIPs(&ipNet, takenIPMap)
+    // Check if sequential IP assignment is enabled
+    assignSequentialIPsStr := os.Getenv("NETBIRD_ASSIGN_SEQUENTIAL_IPS")
+    assignSequentialIPs, err := strconv.Atoi(assignSequentialIPsStr)
+    if err != nil {
+        return nil, err
+    }
 
-	if len(ips) == 0 {
-		return nil, status.Errorf(status.PreconditionFailed, "failed allocating new IP for the ipNet %s - network is out of IPs", ipNet.String())
-	}
+    ips, _ := generateIPs(&ipNet, takenIPMap)
+
+    if len(ips) == 0 {
+        return nil, status.Errorf(status.PreconditionFailed, "failed allocating new IP for the ipNet %s - network is out of IPs", ipNet.String())
+    }
+
+    // pick the smallest available IP if sequential assignment is enabled
+    if assignSequentialIPs == 1 {
+        return ips[0], nil
+    } else {
 
-	// pick a random IP
-	s := rand.NewSource(time.Now().Unix())
-	r := rand.New(s)
-	intn := r.Intn(len(ips))
+    // pick a random IP
+    s := rand.NewSource(time.Now().Unix())
+    r := rand.New(s)
+    intn := r.Intn(len(ips))
 
-	return ips[intn], nil
+    return ips[intn], nil
+    }
 }
 
+
+
 // generateIPs generates a list of all possible IPs of the given network excluding IPs specified in the exclusion list
 func generateIPs(ipNet *net.IPNet, exclusions map[string]struct{}) ([]net.IP, int) {