diff --git a/README.rst b/README.rst
index a54683b..1914361 100644
--- a/README.rst
+++ b/README.rst
@@ -682,6 +682,16 @@
         barbican:
           enabled: true
 
+
+Specify Keystone API version (v3 is default):
+
+.. code-block:: yaml
+
+    cinder:
+      controller:
+        identity:
+          api_version: v2.0
+
 Enhanced logging with logging.conf
 ----------------------------------
 
diff --git a/_modules/cinderng.py b/_modules/cinderng.py
index 71d7c5c..08aaad9 100644
--- a/_modules/cinderng.py
+++ b/_modules/cinderng.py
@@ -32,10 +32,11 @@
         'username': profile['user'],
         'password': profile['password'],
         'project_id': profile['project_id'],
-        'auth_url': "{}://{}:{}/v2.0".format(
+        'auth_url': "{}://{}:{}/{}".format(
             profile['protocol'],
             profile['host'],
-            profile['port']
+            profile['port'],
+            profile.get('api_version', 'v3')
         ),
         'endpoint_type': profile['endpoint_type'],
         'certificate': profile['certificate'],
diff --git a/cinder/client.sls b/cinder/client.sls
index 865df36..c104985 100644
--- a/cinder/client.sls
+++ b/cinder/client.sls
@@ -11,6 +11,18 @@
 {%- set identity = salt['pillar.get']('keystone:client:server:'+client.identity) %}
 {%- endif %}
 
+{#- Keystone V3 is supported only from Ocata release (https://docs.openstack.org/releasenotes/python-cinderclient/ocata.html) #}
+{#- Therefore if api_version is not defined and OpenStack version is mitaka or newton use v2.0. #}
+{%- if 'api_version' in identity %}
+{%- set keystone_api_version = identity.get('api_version') %}
+{%- else %} 
+{%- if 'version' in client and client.version in ['mitaka', 'newton'] %}
+{%- set keystone_api_version = 'v2.0' %}
+{%- else %}
+{%- set keystone_api_version = 'v3' %}
+{%- endif %}
+{%- endif %}
+
 {%- set credentials = {'host': identity.host,
                        'user': identity.user,
                        'password': identity.password,
@@ -19,7 +31,8 @@
                        'protocol': identity.get('protocol', 'http'),
                        'region_name': identity.get('region_name', 'RegionOne'),
                        'endpoint_type': identity.get('endpoint_type', 'internalURL'),
-                       'certificate': identity.get('certificate', client.cacert_file)} %}
+                       'certificate': identity.get('certificate', client.cacert_file),
+                       'api_version': keystone_api_version} %}
 
 {%- for backend_name, backend in client.get('backend', {}).items() %}
 
diff --git a/cinder/controller.sls b/cinder/controller.sls
index 950b6ca..fc660de 100644
--- a/cinder/controller.sls
+++ b/cinder/controller.sls
@@ -279,6 +279,19 @@
 {%- if not grains.get('noservices', False) %}
 
 {%- set identity = controller.identity %}
+
+{#- Keystone V3 is supported only from Ocata release (https://docs.openstack.org/releasenotes/python-cinderclient/ocata.html) #}
+{#- Therefore if api_version is not defined and OpenStack version is mitaka or newton use v2.0. #}
+{%- if 'api_version' in identity %}
+{%- set keystone_api_version = identity.get('api_version') %}
+{%- else %} 
+{%- if 'version' in controller and controller.version in ['mitaka', 'newton'] %}
+{%- set keystone_api_version = 'v2.0' %}
+{%- else %}
+{%- set keystone_api_version = 'v3' %}
+{%- endif %}
+{%- endif %}
+
 {%- set credentials = {'host': identity.host,
                        'user': identity.user,
                        'password': identity.password,
@@ -287,7 +300,8 @@
                        'protocol': identity.get('protocol', 'http'),
                        'region_name': identity.get('region_name', 'RegionOne'),
                        'endpoint_type': identity.get('endpoint_type', 'internalURL'),
-                       'certificate': identity.get('certificate', controller.cacert_file)} %}
+                       'certificate': identity.get('certificate', controller.cacert_file),
+                       'api_version': keystone_api_version} %}
 
 {%- for backend_name, backend in controller.get('backend', {}).items() %}