diff --git a/bgpd/bgp_label.c b/bgpd/bgp_label.c
index dcaaea6868c7..a219c407dabd 100644
--- a/bgpd/bgp_label.c
+++ b/bgpd/bgp_label.c
@@ -120,20 +120,141 @@ mpls_label_t bgp_adv_label(struct bgp_node *rn, struct bgp_path_info *pi,
 	return rn->local_label;
 }
 
+/**
+ * This is passed as the callback function to bgp_labelpool.c:bgp_lp_get()
+ * by bgp_reg_dereg_for_label() when a label needs to be obtained from
+ * label pool.
+ * Note that it will reject the allocated label if a label index is found,
+ * because the label index supposes predictable labels
+ */
+int bgp_reg_for_label_callback(mpls_label_t new_label, void *labelid,
+			       bool allocated)
+{
+	struct bgp_path_info *pi = (struct bgp_path_info *)labelid;
+	struct bgp_node *rn = (struct bgp_node *)pi->net;
+	char addr[PREFIX_STRLEN];
+
+	prefix2str(&rn->p, addr, PREFIX_STRLEN);
+
+	if (BGP_DEBUG(labelpool, LABELPOOL))
+		zlog_debug("%s: FEC %s label=%u, allocated=%d", __func__, addr,
+			   new_label, allocated);
+
+	if (!allocated) {
+		/*
+		 * previously-allocated label is now invalid
+		 */
+		if (pi->attr->label_index == MPLS_INVALID_LABEL_INDEX
+		    && pi->attr->label != MPLS_LABEL_NONE
+		    && CHECK_FLAG(rn->flags, BGP_NODE_REGISTERED_FOR_LABEL)) {
+			bgp_unregister_for_label(rn);
+			label_ntop(MPLS_LABEL_IMPLICIT_NULL, 1,
+				   &rn->local_label);
+			bgp_set_valid_label(&rn->local_label);
+		}
+		return 0;
+	}
+
+	/*
+	 * label index is assigned, this should be handled by SR-related code,
+	 * so retry FEC registration and then reject label allocation for
+	 * it to be released to label pool
+	 */
+	if (pi->attr->label_index != MPLS_INVALID_LABEL_INDEX) {
+		flog_err(
+			EC_BGP_LABEL,
+			"%s: FEC %s Rejecting allocated label %u as Label Index is %u",
+			__func__, addr, new_label, pi->attr->label_index);
+
+		bgp_register_for_label(pi->net, pi);
+
+		return -1;
+	}
+
+	if (pi->attr->label != MPLS_INVALID_LABEL) {
+		if (new_label == pi->attr->label) {
+			/* already have same label, accept but do nothing */
+			return 0;
+		}
+		/* Shouldn't happen: different label allocation */
+		flog_err(EC_BGP_LABEL,
+			 "%s: %s had label %u but got new assignment %u",
+			 __func__, addr, pi->attr->label, new_label);
+		/* continue means use new one */
+	}
+
+	label_ntop(new_label, 1, &rn->local_label);
+	bgp_set_valid_label(&rn->local_label);
+
+	/*
+	 * Get back to registering the FEC
+	 */
+	bgp_register_for_label(pi->net, pi);
+
+	return 0;
+}
+
 void bgp_reg_dereg_for_label(struct bgp_node *rn, struct bgp_path_info *pi,
-			     int reg)
+			     bool reg)
 {
+	bool with_label_index = false;
 	struct stream *s;
 	struct prefix *p;
+	mpls_label_t *local_label;
 	int command;
 	uint16_t flags = 0;
 	size_t flags_pos = 0;
+	char addr[PREFIX_STRLEN];
+
+	p = &(rn->p);
+	local_label = &(rn->local_label);
+	/* this prevents the loop when we're called by
+	 * bgp_reg_for_label_callback()
+	 */
+	bool have_label_to_reg = bgp_is_valid_label(local_label)
+			&& label_pton(local_label) != MPLS_LABEL_IMPLICIT_NULL;
+
+	if (reg) {
+		assert(pi);
+		/*
+		 * Determine if we will let zebra should derive label from
+		 * label index instead of bgpd requesting from label pool
+		 */
+		if (CHECK_FLAG(pi->attr->flag,
+			    ATTR_FLAG_BIT(BGP_ATTR_PREFIX_SID))
+			&& pi->attr->label_index != BGP_INVALID_LABEL_INDEX) {
+			with_label_index = true;
+		} else {
+			/*
+			 * If no label index was provided -- assume any label
+			 * from label pool will do. This means that label index
+			 * always takes precedence over auto-assigned labels.
+			 */
+			if (!have_label_to_reg) {
+				if (BGP_DEBUG(labelpool, LABELPOOL)) {
+					prefix2str(p, addr, PREFIX_STRLEN);
+					zlog_debug("%s: Requesting label from LP for %s",
+						 __func__, addr);
+				}
+				/* bgp_reg_for_label_callback() will call back
+				 * __func__ when it gets a label from the pool.
+				 * This means we'll never register FECs without
+				 * valid labels.
+				 */
+				bgp_lp_get(LP_TYPE_BGP_LU, pi,
+				    bgp_reg_for_label_callback);
+				return;
+			}
+		}
+	}
 
 	/* Check socket. */
 	if (!zclient || zclient->sock < 0)
 		return;
 
-	p = &(rn->p);
+	/* If the route node has a local_label assigned or the
+	 * path node has an MPLS SR label index allowing zebra to
+	 * derive the label, proceed with registration. */
 	s = zclient->obuf;
 	stream_reset(s);
 	command = (reg) ? ZEBRA_FEC_REGISTER : ZEBRA_FEC_UNREGISTER;
@@ -143,12 +264,12 @@ void bgp_reg_dereg_for_label(struct bgp_node *rn, struct bgp_path_info *pi,
 	stream_putw(s, PREFIX_FAMILY(p));
 	stream_put_prefix(s, p);
 	if (reg) {
-		assert(pi);
-		if (pi->attr->flag & ATTR_FLAG_BIT(BGP_ATTR_PREFIX_SID)) {
-			if (pi->attr->label_index != BGP_INVALID_LABEL_INDEX) {
-				flags |= ZEBRA_FEC_REGISTER_LABEL_INDEX;
-				stream_putl(s, pi->attr->label_index);
-			}
+		if (have_label_to_reg) {
+			flags |= ZEBRA_FEC_REGISTER_LABEL;
+			stream_putl(s, label_pton(local_label));
+		} else if (with_label_index) {
+			flags |= ZEBRA_FEC_REGISTER_LABEL_INDEX;
+			stream_putl(s, pi->attr->label_index);
 		}
 		SET_FLAG(rn->flags, BGP_NODE_REGISTERED_FOR_LABEL);
 	} else
diff --git a/bgpd/bgp_label.h b/bgpd/bgp_label.h
index b0fc07e54770..89bc9aabb03b 100644
--- a/bgpd/bgp_label.h
+++ b/bgpd/bgp_label.h
@@ -30,8 +30,10 @@ struct bgp_node;
 struct bgp_path_info;
 struct peer;
 
+extern int bgp_reg_for_label_callback(mpls_label_t new_label, void *labelid,
+				    bool allocated);
 extern void bgp_reg_dereg_for_label(struct bgp_node *rn,
-				    struct bgp_path_info *pi, int reg);
+				    struct bgp_path_info *pi, bool reg);
 extern int bgp_parse_fec_update(void);
 extern mpls_label_t bgp_adv_label(struct bgp_node *rn, struct bgp_path_info *pi,
 				  struct peer *to, afi_t afi, safi_t safi);
@@ -87,12 +89,12 @@ static inline void bgp_unset_valid_label(mpls_label_t *label)
 static inline void bgp_register_for_label(struct bgp_node *rn,
 					  struct bgp_path_info *pi)
 {
-	bgp_reg_dereg_for_label(rn, pi, 1);
+	bgp_reg_dereg_for_label(rn, pi, true);
 }
 
 static inline void bgp_unregister_for_label(struct bgp_node *rn)
 {
-	bgp_reg_dereg_for_label(rn, NULL, 0);
+	bgp_reg_dereg_for_label(rn, NULL, false);
 }
 
 /* Label stream to value */
diff --git a/bgpd/bgp_labelpool.h b/bgpd/bgp_labelpool.h
index fa35cde0e126..0507e65489e4 100644
--- a/bgpd/bgp_labelpool.h
+++ b/bgpd/bgp_labelpool.h
@@ -29,6 +29,7 @@
  * Types used in bgp_lp_get for debug tracking; add more as needed
  */
 #define LP_TYPE_VRF	0x00000001
+#define LP_TYPE_BGP_LU	0x00000002
 
 struct labelpool {
 	struct skiplist		*ledger;	/* all requests */
diff --git a/bgpd/bgp_route.c b/bgpd/bgp_route.c
index 23002fb74ca8..2c361bef4d5b 100644
--- a/bgpd/bgp_route.c
+++ b/bgpd/bgp_route.c
@@ -2265,20 +2265,26 @@ static void bgp_process_main_one(struct bgp *bgp, struct bgp_node *rn,
 
 	/* Do we need to allocate or free labels?
 	 * Right now, since we only deal with per-prefix labels, it is not
-	 * necessary to do this upon changes to best path except if the label
-	 * index changes
+	 * necessary to do this upon changes to best path. Exceptions:
+	 * - label index has changed -> recalculate resulting label
+	 * - path_info sub_type changed -> switch to/from implicit-null
+	 * - no valid label (due to removed static label binding) -> get new one
 	 */
 	if (bgp->allocate_mpls_labels[afi][safi]) {
 		if (new_select) {
 			if (!old_select
 			    || bgp_label_index_differs(new_select, old_select)
-			    || new_select->sub_type != old_select->sub_type) {
+			    || new_select->sub_type != old_select->sub_type
+			    || !bgp_is_valid_label(&rn->local_label)) {
+				/* Enforced penultimate hop popping:
+				 * implicit-null for local routes, aggregate
+				 * and redistributed routes
+				 */
 				if (new_select->sub_type == BGP_ROUTE_STATIC
-				    && new_select->attr->flag
-					       & ATTR_FLAG_BIT(
-							 BGP_ATTR_PREFIX_SID)
-				    && new_select->attr->label_index
-					       != BGP_INVALID_LABEL_INDEX) {
+				    || new_select->sub_type
+						== BGP_ROUTE_AGGREGATE
+				    || new_select->sub_type
+						== BGP_ROUTE_REDISTRIBUTE) {
 					if (CHECK_FLAG(
 						    rn->flags,
 						    BGP_NODE_REGISTERED_FOR_LABEL))
diff --git a/lib/zclient.h b/lib/zclient.h
index adb48b252a69..8fe711f31044 100644
--- a/lib/zclient.h
+++ b/lib/zclient.h
@@ -58,6 +58,10 @@
 #define ZEBRA_IPTABLES_FORWARD 0
 #define ZEBRA_IPTABLES_DROP    1
 
+/* Zebra FEC register command flags. */
+#define ZEBRA_FEC_REGISTER_LABEL          0x1
+#define ZEBRA_FEC_REGISTER_LABEL_INDEX    0x2
+
 extern struct sockaddr_storage zclient_addr;
 extern socklen_t zclient_addr_len;
 
diff --git a/lib/zebra.h b/lib/zebra.h
index 0f3f45f7ba18..09115951e9b6 100644
--- a/lib/zebra.h
+++ b/lib/zebra.h
@@ -452,9 +452,6 @@ extern const char *zserv_command_string(unsigned int command);
  */
 #define ZEBRA_FLAG_ONLINK             0x80
 
-/* Zebra FEC flags. */
-#define ZEBRA_FEC_REGISTER_LABEL_INDEX        0x1
-
 #ifndef INADDR_LOOPBACK
 #define	INADDR_LOOPBACK	0x7f000001	/* Internet address 127.0.0.1.  */
 #endif
diff --git a/zebra/zapi_msg.c b/zebra/zapi_msg.c
index 9b84a6e58a5c..26a3cd5b42a0 100644
--- a/zebra/zapi_msg.c
+++ b/zebra/zapi_msg.c
@@ -1187,6 +1187,7 @@ static void zread_fec_register(ZAPI_HANDLER_ARGS)
 	unsigned short l = 0;
 	struct prefix p;
 	uint16_t flags;
+	uint32_t label = MPLS_INVALID_LABEL;
 	uint32_t label_index = MPLS_INVALID_LABEL_INDEX;
 
 	s = msg;
@@ -1229,12 +1230,15 @@ static void zread_fec_register(ZAPI_HANDLER_ARGS)
 		l += 5;
 		STREAM_GET(&p.u.prefix, s, PSIZE(p.prefixlen));
 		l += PSIZE(p.prefixlen);
-		if (flags & ZEBRA_FEC_REGISTER_LABEL_INDEX) {
+		if (flags & ZEBRA_FEC_REGISTER_LABEL) {
+			STREAM_GETL(s, label);
+			l += 4;
+		} else if (flags & ZEBRA_FEC_REGISTER_LABEL_INDEX) {
 			STREAM_GETL(s, label_index);
 			l += 4;
-		} else
-			label_index = MPLS_INVALID_LABEL_INDEX;
-		zebra_mpls_fec_register(zvrf, &p, label_index, client);
+		}
+
+		zebra_mpls_fec_register(zvrf, &p, label, label_index, client);
 	}
 
 stream_failure:
diff --git a/zebra/zebra_errors.c b/zebra/zebra_errors.c
index 32f665383245..d7c17829cdc6 100644
--- a/zebra/zebra_errors.c
+++ b/zebra/zebra_errors.c
@@ -85,6 +85,12 @@ static struct log_ref ferr_zebra_err[] = {
 		.description = "A client requested a label binding for a new FEC, but Zebra was unable to add the FEC to its internal table.",
 		.suggestion = "Notify a developer.",
 	},
+	{
+		.code = EC_ZEBRA_FEC_LABEL_INDEX_LABEL_CONFLICT,
+		.title = "Refused to add FEC for MPLS client with both label index and label specified",
+		.description = "A client requested a label binding for a new FEC specifying a label index and a label at the same time.",
+		.suggestion = "Notify a developer.",
+	},
 	{
 		.code = EC_ZEBRA_FEC_RM_FAILED,
 		.title = "Failed to remove FEC for MPLS client",
diff --git a/zebra/zebra_errors.h b/zebra/zebra_errors.h
index cf2d6a7cf51e..c3cdc4ed4217 100644
--- a/zebra/zebra_errors.h
+++ b/zebra/zebra_errors.h
@@ -37,6 +37,7 @@ enum zebra_log_refs {
 	EC_ZEBRA_DP_INVALID_RC,
 	EC_ZEBRA_WQ_NONEXISTENT,
 	EC_ZEBRA_FEC_ADD_FAILED,
+	EC_ZEBRA_FEC_LABEL_INDEX_LABEL_CONFLICT,
 	EC_ZEBRA_FEC_RM_FAILED,
 	EC_ZEBRA_IRDP_LEN_MISMATCH,
 	EC_ZEBRA_RNH_UNKNOWN_FAMILY,
diff --git a/zebra/zebra_mpls.c b/zebra/zebra_mpls.c
index 5fe01161586c..c0764cd4b8c6 100644
--- a/zebra/zebra_mpls.c
+++ b/zebra/zebra_mpls.c
@@ -1813,17 +1813,22 @@ int zebra_mpls_lsp_uninstall(struct zebra_vrf *zvrf, struct route_node *rn,
  * NOTE: If there is a manually configured label binding, that is used.
  * Otherwise, if a label index is specified, it means we have to allocate the
  * label from a locally configured label block (SRGB), if one exists and index
- * is acceptable.
+ * is acceptable. If no label index then just register the specified label.
+ * NOTE2: Either label or label_index is expected to be set to MPLS_INVALID_*
+ * by the calling function. Register requests with both will be rejected.
  */
 int zebra_mpls_fec_register(struct zebra_vrf *zvrf, struct prefix *p,
-			    uint32_t label_index, struct zserv *client)
+			    uint32_t label, uint32_t label_index,
+			    struct zserv *client)
 {
 	struct route_table *table;
 	zebra_fec_t *fec;
 	char buf[BUFSIZ];
-	int new_client;
-	int label_change = 0;
+	bool new_client;
+	bool label_change = false;
 	uint32_t old_label;
+	bool have_label_index = (label_index != MPLS_INVALID_LABEL_INDEX);
+	bool is_configured_fec = false; /* indicate statically configured FEC */
 
 	table = zvrf->fec_table[family2afi(PREFIX_FAMILY(p))];
 	if (!table)
@@ -1832,12 +1837,20 @@ int zebra_mpls_fec_register(struct zebra_vrf *zvrf, struct prefix *p,
 	if (IS_ZEBRA_DEBUG_MPLS)
 		prefix2str(p, buf, BUFSIZ);
 
+	if (label != MPLS_INVALID_LABEL && have_label_index) {
+		flog_err(
+			EC_ZEBRA_FEC_LABEL_INDEX_LABEL_CONFLICT,
+			"Rejecting FEC register for %s with both label %u and Label Index %u specified, client %s",
+			buf, label, label_index,
+			zebra_route_string(client->proto));
+		return -1;
+	}
+
 	/* Locate FEC */
 	fec = fec_find(table, p);
 	if (!fec) {
-		fec = fec_add(table, p, MPLS_INVALID_LABEL, 0, label_index);
+		fec = fec_add(table, p, label, 0, label_index);
 		if (!fec) {
-			prefix2str(p, buf, BUFSIZ);
 			flog_err(
 				EC_ZEBRA_FEC_ADD_FAILED,
 				"Failed to add FEC %s upon register, client %s",
@@ -1846,16 +1859,19 @@ int zebra_mpls_fec_register(struct zebra_vrf *zvrf, struct prefix *p,
 		}
 
 		old_label = MPLS_INVALID_LABEL;
-		new_client = 1;
+		new_client = true;
 	} else {
+		/* Check if the FEC has been statically defined in the config */
+		is_configured_fec = fec->flags & FEC_FLAG_CONFIGURED;
 		/* Client may register same FEC with different label index. */
 		new_client =
 			(listnode_lookup(fec->client_list, client) == NULL);
-		if (!new_client && fec->label_index == label_index)
+		if (!new_client && fec->label_index == label_index
+		    && fec->label == label)
 			/* Duplicate register */
 			return 0;
 
-		/* Save current label, update label index */
+		/* Save current label, update the FEC */
 		old_label = fec->label;
 		fec->label_index = label_index;
 	}
@@ -1864,21 +1880,29 @@ int zebra_mpls_fec_register(struct zebra_vrf *zvrf, struct prefix *p,
 		listnode_add(fec->client_list, client);
 
 	if (IS_ZEBRA_DEBUG_MPLS)
-		zlog_debug("FEC %s Label Index %u %s by client %s", buf,
-			   label_index, new_client ? "registered" : "updated",
-			   zebra_route_string(client->proto));
-
-	/* If not a configured FEC, derive the local label (from label index)
-	 * or reset it.
+		zlog_debug("FEC %s label%s %u %s by client %s%s", buf,
+			   have_label_index ? " index" : "",
+			   have_label_index ? label_index : label,
+			   new_client ? "registered" : "updated",
+			   zebra_route_string(client->proto),
+			   is_configured_fec
+				   ? ", but using statically configured label"
+				   : "");
+
+	/* If not a statically configured FEC, derive the local label
+	 * from label index or use the provided label
 	 */
-	if (!(fec->flags & FEC_FLAG_CONFIGURED)) {
-		fec_derive_label_from_index(zvrf, fec);
+	if (!is_configured_fec) {
+		if (have_label_index)
+			fec_derive_label_from_index(zvrf, fec);
+		else
+			fec->label = label;
 
 		/* If no label change, exit. */
 		if (fec->label == old_label)
 			return 0;
 
-		label_change = 1;
+		label_change = true;
 	}
 
 	/* If new client or label change, update client and install or uninstall
@@ -2106,8 +2130,8 @@ int zebra_mpls_static_fec_del(struct zebra_vrf *zvrf, struct prefix *p)
 
 	if (IS_ZEBRA_DEBUG_MPLS) {
 		prefix2str(p, buf, BUFSIZ);
-		zlog_debug("Delete fec %s label index %u", buf,
-			   fec->label_index);
+		zlog_debug("Delete fec %s label %u label index %u", buf,
+			   fec->label, fec->label_index);
 	}
 
 	old_label = fec->label;
diff --git a/zebra/zebra_mpls.h b/zebra/zebra_mpls.h
index 86bee129cfe5..c250fc4058cc 100644
--- a/zebra/zebra_mpls.h
+++ b/zebra/zebra_mpls.h
@@ -191,16 +191,9 @@ int zebra_mpls_lsp_install(struct zebra_vrf *zvrf, struct route_node *rn,
 int zebra_mpls_lsp_uninstall(struct zebra_vrf *zvrf, struct route_node *rn,
 			     struct route_entry *re);
 
-/*
- * Registration from a client for the label binding for a FEC. If a binding
- * already exists, it is informed to the client.
- * NOTE: If there is a manually configured label binding, that is used.
- * Otherwise, if aa label index is specified, it means we have to allocate the
- * label from a locally configured label block (SRGB), if one exists and index
- * is acceptable.
- */
 int zebra_mpls_fec_register(struct zebra_vrf *zvrf, struct prefix *p,
-			    uint32_t label_index, struct zserv *client);
+			    uint32_t label, uint32_t label_index,
+			    struct zserv *client);
 
 /*
  * Deregistration from a client for the label binding for a FEC. The FEC