diff --git a/include/image-commands.mk b/include/image-commands.mk
index ea602662a5..1d69485019 100644
--- a/include/image-commands.mk
+++ b/include/image-commands.mk
@@ -307,7 +307,7 @@ define Build/fit
 		$(if $(DEVICE_FDT_NUM),-n $(DEVICE_FDT_NUM)) \
 		$(if $(DEVICE_DTS_DELIMITER),-l $(DEVICE_DTS_DELIMITER)) \
 		$(if $(DEVICE_DTS_LOADADDR),-s $(DEVICE_DTS_LOADADDR)) \
-		$(if $(DEVICE_DTS_OVERLAY),$(foreach dtso,$(DEVICE_DTS_OVERLAY), -O $(dtso):$(KERNEL_BUILD_DIR)/image-$(dtso).dtb)) \
+		$(if $(DEVICE_DTS_OVERLAY),$(foreach dtso,$(DEVICE_DTS_OVERLAY), -O $(dtso):$(KERNEL_BUILD_DIR)/image-$(dtso).dtbo)) \
 		-c $(if $(DEVICE_DTS_CONFIG),$(DEVICE_DTS_CONFIG),"config-1") \
 		-A $(LINUX_KARCH) -v $(LINUX_VERSION)
 	PATH=$(LINUX_DIR)/scripts/dtc:$(PATH) mkimage $(if $(findstring external,$(word 3,$(1))),\
diff --git a/include/image.mk b/include/image.mk
index 0eae216ded..0cf110df93 100644
--- a/include/image.mk
+++ b/include/image.mk
@@ -554,16 +554,33 @@ define Device/Build/dtb
   image_prepare: $(KDIR)/image-$(1).dtb
   endif
 
+endef
+
+define Device/Build/dtbo
+  ifndef BUILD_DTS_$(1)
+  BUILD_DTS_$(1) := 1
+  $(KDIR)/image-$(1).dtbo: FORCE
+	$(call Image/BuildDTB,$(strip $(2))/$(strip $(3)).dtso,$$@)
+
+  image_prepare: $(KDIR)/image-$(1).dtbo
+  endif
+
 endef
 endif
 
 define Device/Build/kernel
-  $$(eval $$(foreach dts,$$(DEVICE_DTS) $$(DEVICE_DTS_OVERLAY), \
+  $$(eval $$(foreach dts,$$(DEVICE_DTS), \
 	$$(call Device/Build/dtb,$$(notdir $$(dts)), \
 		$$(if $$(DEVICE_DTS_DIR),$$(DEVICE_DTS_DIR),$$(DTS_DIR)), \
 		$$(dts) \
 	) \
   ))
+  $$(eval $$(foreach dtso,$$(DEVICE_DTS_OVERLAY), \
+	$$(call Device/Build/dtbo,$$(notdir $$(dtso)), \
+		$$(if $$(DEVICE_DTS_DIR),$$(DEVICE_DTS_DIR),$$(DTS_DIR)), \
+		$$(dtso) \
+	) \
+  ))
 
   $(KDIR)/$$(KERNEL_NAME):: image_prepare
   $$(_TARGET): $$(if $$(KERNEL_INSTALL),$(BIN_DIR)/$$(KERNEL_IMAGE))
diff --git a/scripts/mkits.sh b/scripts/mkits.sh
index bf75d69f09..b1c6f98867 100755
--- a/scripts/mkits.sh
+++ b/scripts/mkits.sh
@@ -191,13 +191,10 @@ OVCONFIGS=""
 "
 	OVCONFIGS="$OVCONFIGS
 
-		config-$ovname {
-			description = \"OpenWrt ${DEVICE} with $ovname\";
-			kernel = \"kernel${REFERENCE_CHAR}1\";
-			fdt = \"fdt${REFERENCE_CHAR}$FDTNUM\", \"$ovnode\";
-			${LOADABLES:+loadables = ${LOADABLES};}
+		$ovname {
+			description = \"OpenWrt ${DEVICE} overlay $ovname\";
+			fdt = \"$ovnode\";
 			${COMPATIBLE_PROP}
-			${INITRD_PROP}
 		};
 	"
 done