diff --git a/container b/container
index d4f148434..d5141e5a5 100755
--- a/container
+++ b/container
@@ -689,10 +689,27 @@ def _verify_signature(hkp_client: str, data_file: pathlib.Path,
 
 def _extract_image(compressed_file: pathlib.Path):
     """Extract the image file."""
-    decompressed_file = compressed_file.with_suffix('')
+    # Strip the .xz extension, then replace .img with .raw
+    decompressed_file = compressed_file.with_suffix('').with_suffix('.raw')
+    older_image = compressed_file.with_suffix('')
+
     if decompressed_file.exists():
         return decompressed_file
 
+    # Rename older image and its corresponding state files.
+    if older_image.exists():
+        logger.info('Renaming .img file to .raw')
+        older_image.rename(decompressed_file)
+
+        for ext in ['.setup', '.provisioned']:
+            old_state = older_image.with_suffix(older_image.suffix + ext)
+            new_state = decompressed_file.with_suffix(
+                decompressed_file.suffix + ext)
+            if old_state.exists():
+                old_state.rename(new_state)
+
+        return decompressed_file
+
     logger.info('Decompressing file %s', compressed_file)
     partial_file = compressed_file.with_suffix('.partial')
     with partial_file.open('w', encoding='utf-8') as file_handle:
@@ -715,7 +732,8 @@ def _get_compressed_image_path(distribution: str) -> pathlib.Path:
 def _get_image_file(distribution: str) -> pathlib.Path:
     """Return the path of the image file."""
     compressed_image = _get_compressed_image_path(distribution)
-    return compressed_image.with_suffix('')
+    # Strip the .xz extension, then replace .img with .raw
+    return compressed_image.with_suffix('').with_suffix('.raw')
 
 
 def _get_project_folder() -> pathlib.Path:
@@ -1337,9 +1355,8 @@ VirtualEthernet=yes
             if result.returncode:
                 raise Exception(f'Image file {image_link} is not a symlink.')
 
-            subprocess.run(['sudo', 'rm', '--force',
-                            str(image_link)], check=False)
-
+        # May be linked to wrong place (such as old .img file)
+        subprocess.run(['sudo', 'rm', '--force', str(image_link)], check=False)
         subprocess.run([
             'sudo', 'ln', '--symbolic',
             str(image_file.resolve()),