diff --git a/src/Api/Auth/Controllers/AccountsController.cs b/src/Api/Auth/Controllers/AccountsController.cs
index bb7a3d0a6..142617466 100644
--- a/src/Api/Auth/Controllers/AccountsController.cs
+++ b/src/Api/Auth/Controllers/AccountsController.cs
@@ -17,6 +17,7 @@ using Bit.Core.AdminConsole.Services;
 using Bit.Core.Auth.Entities;
 using Bit.Core.Auth.Models.Api.Request.Accounts;
 using Bit.Core.Auth.Models.Data;
+using Bit.Core.Auth.UserFeatures.TdeOffboardingPassword.Interfaces;
 using Bit.Core.Auth.UserFeatures.UserKey;
 using Bit.Core.Auth.UserFeatures.UserMasterPassword.Interfaces;
 using Bit.Core.Billing.Models;
@@ -53,6 +54,7 @@ public class AccountsController : Controller
     private readonly IUserService _userService;
     private readonly IPolicyService _policyService;
     private readonly ISetInitialMasterPasswordCommand _setInitialMasterPasswordCommand;
+    private readonly ITdeOffboardingPasswordCommand _tdeOffboardingPasswordCommand;
     private readonly IRotateUserKeyCommand _rotateUserKeyCommand;
     private readonly IFeatureService _featureService;
     private readonly ISubscriberService _subscriberService;
@@ -83,6 +85,7 @@ public class AccountsController : Controller
         IUserService userService,
         IPolicyService policyService,
         ISetInitialMasterPasswordCommand setInitialMasterPasswordCommand,
+        ITdeOffboardingPasswordCommand tdeOffboardingPasswordCommand,
         IRotateUserKeyCommand rotateUserKeyCommand,
         IFeatureService featureService,
         ISubscriberService subscriberService,
@@ -106,6 +109,7 @@ public class AccountsController : Controller
         _userService = userService;
         _policyService = policyService;
         _setInitialMasterPasswordCommand = setInitialMasterPasswordCommand;
+        _tdeOffboardingPasswordCommand = tdeOffboardingPasswordCommand;
         _rotateUserKeyCommand = rotateUserKeyCommand;
         _featureService = featureService;
         _subscriberService = subscriberService;
@@ -877,6 +881,29 @@ public class AccountsController : Controller
         throw new BadRequestException(ModelState);
     }
 
+    [HttpPut("update-tde-offboarding-password")]
+    public async Task PutUpdateTdePasswordAsync([FromBody] UpdateTdeOffboardingPasswordRequestModel model)
+    {
+        var user = await _userService.GetUserByPrincipalAsync(User);
+        if (user == null)
+        {
+            throw new UnauthorizedAccessException();
+        }
+
+        var result = await _tdeOffboardingPasswordCommand.UpdateTdeOffboardingPasswordAsync(user, model.NewMasterPasswordHash, model.Key, model.MasterPasswordHint);
+        if (result.Succeeded)
+        {
+            return;
+        }
+
+        foreach (var error in result.Errors)
+        {
+            ModelState.AddModelError(string.Empty, error.Description);
+        }
+
+        throw new BadRequestException(ModelState);
+    }
+
     [HttpPost("request-otp")]
     public async Task PostRequestOTP()
     {
diff --git a/src/Api/Auth/Models/Request/Accounts/UpdateTdeOffboardingPasswordRequestModel.cs b/src/Api/Auth/Models/Request/Accounts/UpdateTdeOffboardingPasswordRequestModel.cs
new file mode 100644
index 000000000..e246a99c9
--- /dev/null
+++ b/src/Api/Auth/Models/Request/Accounts/UpdateTdeOffboardingPasswordRequestModel.cs
@@ -0,0 +1,14 @@
+using System.ComponentModel.DataAnnotations;
+
+namespace Bit.Api.Auth.Models.Request.Accounts;
+
+public class UpdateTdeOffboardingPasswordRequestModel
+{
+    [Required]
+    [StringLength(300)]
+    public string NewMasterPasswordHash { get; set; }
+    [Required]
+    public string Key { get; set; }
+    [StringLength(50)]
+    public string MasterPasswordHint { get; set; }
+}
diff --git a/src/Core/Auth/Models/Api/Response/UserDecryptionOptions.cs b/src/Core/Auth/Models/Api/Response/UserDecryptionOptions.cs
index 06990afea..b5f2b77cf 100644
--- a/src/Core/Auth/Models/Api/Response/UserDecryptionOptions.cs
+++ b/src/Core/Auth/Models/Api/Response/UserDecryptionOptions.cs
@@ -54,18 +54,21 @@ public class TrustedDeviceUserDecryptionOption
     public bool HasAdminApproval { get; }
     public bool HasLoginApprovingDevice { get; }
     public bool HasManageResetPasswordPermission { get; }
+    public bool IsTdeOffboarding { get; }
     public string? EncryptedPrivateKey { get; }
     public string? EncryptedUserKey { get; }
 
     public TrustedDeviceUserDecryptionOption(bool hasAdminApproval,
         bool hasLoginApprovingDevice,
         bool hasManageResetPasswordPermission,
+        bool isTdeOffboarding,
         string? encryptedPrivateKey,
         string? encryptedUserKey)
     {
         HasAdminApproval = hasAdminApproval;
         HasLoginApprovingDevice = hasLoginApprovingDevice;
         HasManageResetPasswordPermission = hasManageResetPasswordPermission;
+        IsTdeOffboarding = isTdeOffboarding;
         EncryptedPrivateKey = encryptedPrivateKey;
         EncryptedUserKey = encryptedUserKey;
     }
diff --git a/src/Core/Auth/UserFeatures/TdeOffboardingPassword/Interfaces/ITdeOffboardingPasswordCommand.cs b/src/Core/Auth/UserFeatures/TdeOffboardingPassword/Interfaces/ITdeOffboardingPasswordCommand.cs
new file mode 100644
index 000000000..1ff64ffab
--- /dev/null
+++ b/src/Core/Auth/UserFeatures/TdeOffboardingPassword/Interfaces/ITdeOffboardingPasswordCommand.cs
@@ -0,0 +1,14 @@
+using Bit.Core.Entities;
+using Microsoft.AspNetCore.Identity;
+
+namespace Bit.Core.Auth.UserFeatures.TdeOffboardingPassword.Interfaces;
+
+/// <summary>
+/// <para>Manages the setting of the master password for JIT provisioned TDE <see cref="User"/> in an organization, after the organization disabled TDE.</para>
+/// <para>This command is invoked, when the user first logs in after the organization has switched from TDE to master password based decryption.</para>
+/// </summary>
+public interface ITdeOffboardingPasswordCommand
+{
+    public Task<IdentityResult> UpdateTdeOffboardingPasswordAsync(User user, string masterPassword, string key,
+        string orgSsoIdentifier);
+}
diff --git a/src/Core/Auth/UserFeatures/TdeOffboardingPassword/TdeOffboardingPasswordCommand.cs b/src/Core/Auth/UserFeatures/TdeOffboardingPassword/TdeOffboardingPasswordCommand.cs
new file mode 100644
index 000000000..d33db18e4
--- /dev/null
+++ b/src/Core/Auth/UserFeatures/TdeOffboardingPassword/TdeOffboardingPasswordCommand.cs
@@ -0,0 +1,99 @@
+using Bit.Core.Auth.Repositories;
+using Bit.Core.Auth.UserFeatures.TdeOffboardingPassword.Interfaces;
+using Bit.Core.Entities;
+using Bit.Core.Enums;
+using Bit.Core.Exceptions;
+using Bit.Core.Repositories;
+using Bit.Core.Services;
+using Microsoft.AspNetCore.Identity;
+
+namespace Bit.Core.Auth.UserFeatures.UserMasterPassword;
+
+public class TdeOffboardingPasswordCommand : ITdeOffboardingPasswordCommand
+{
+    private readonly IUserService _userService;
+    private readonly IUserRepository _userRepository;
+    private readonly IEventService _eventService;
+    private readonly IOrganizationUserRepository _organizationUserRepository;
+    private readonly ISsoUserRepository _ssoUserRepository;
+    private readonly ISsoConfigRepository _ssoConfigRepository;
+    private readonly IPushNotificationService _pushService;
+
+
+    public TdeOffboardingPasswordCommand(
+        IUserService userService,
+        IUserRepository userRepository,
+        IEventService eventService,
+        IOrganizationUserRepository organizationUserRepository,
+        ISsoUserRepository ssoUserRepository,
+        ISsoConfigRepository ssoConfigRepository,
+        IPushNotificationService pushService)
+    {
+        _userService = userService;
+        _userRepository = userRepository;
+        _eventService = eventService;
+        _organizationUserRepository = organizationUserRepository;
+        _ssoUserRepository = ssoUserRepository;
+        _ssoConfigRepository = ssoConfigRepository;
+        _pushService = pushService;
+    }
+
+    public async Task<IdentityResult> UpdateTdeOffboardingPasswordAsync(User user, string newMasterPassword, string key, string hint)
+    {
+        if (string.IsNullOrWhiteSpace(newMasterPassword))
+        {
+            throw new BadRequestException("Master password is required.");
+        }
+
+        if (string.IsNullOrWhiteSpace(key))
+        {
+            throw new BadRequestException("Key is required.");
+        }
+
+        if (user.HasMasterPassword())
+        {
+            throw new BadRequestException("User already has a master password.");
+        }
+        var orgUserDetails = await _organizationUserRepository.GetManyDetailsByUserAsync(user.Id);
+        orgUserDetails = orgUserDetails.Where(x => x.UseSso).ToList();
+        if (orgUserDetails.Count == 0)
+        {
+            throw new BadRequestException("User is not part of any organization that has SSO enabled.");
+        }
+
+        var orgSSOUsers = await Task.WhenAll(orgUserDetails.Select(async x => await _ssoUserRepository.GetByUserIdOrganizationIdAsync(x.OrganizationId, user.Id)));
+        if (orgSSOUsers.Length != 1)
+        {
+            throw new BadRequestException("User is part of no or multiple SSO configurations.");
+        }
+
+        var orgUser = orgUserDetails.First();
+        var orgSSOConfig = await _ssoConfigRepository.GetByOrganizationIdAsync(orgUser.OrganizationId);
+        if (orgSSOConfig == null)
+        {
+            throw new BadRequestException("Organization SSO configuration not found.");
+        }
+        else if (orgSSOConfig.GetData().MemberDecryptionType != Enums.MemberDecryptionType.MasterPassword)
+        {
+            throw new BadRequestException("Organization SSO Member Decryption Type is not Master Password.");
+        }
+
+        var result = await _userService.UpdatePasswordHash(user, newMasterPassword);
+        if (!result.Succeeded)
+        {
+            return result;
+        }
+
+        user.RevisionDate = user.AccountRevisionDate = DateTime.UtcNow;
+        user.ForcePasswordReset = false;
+        user.Key = key;
+        user.MasterPasswordHint = hint;
+
+        await _userRepository.ReplaceAsync(user);
+        await _eventService.LogUserEventAsync(user.Id, EventType.User_UpdatedTempPassword);
+        await _pushService.PushLogOutAsync(user.Id);
+
+        return IdentityResult.Success;
+    }
+
+}
diff --git a/src/Core/Auth/UserFeatures/UserServiceCollectionExtensions.cs b/src/Core/Auth/UserFeatures/UserServiceCollectionExtensions.cs
index cbe7b0d4e..15e6f5e44 100644
--- a/src/Core/Auth/UserFeatures/UserServiceCollectionExtensions.cs
+++ b/src/Core/Auth/UserFeatures/UserServiceCollectionExtensions.cs
@@ -2,6 +2,7 @@
 
 using Bit.Core.Auth.UserFeatures.Registration;
 using Bit.Core.Auth.UserFeatures.Registration.Implementations;
+using Bit.Core.Auth.UserFeatures.TdeOffboardingPassword.Interfaces;
 using Bit.Core.Auth.UserFeatures.UserKey;
 using Bit.Core.Auth.UserFeatures.UserKey.Implementations;
 using Bit.Core.Auth.UserFeatures.UserMasterPassword;
@@ -22,6 +23,7 @@ public static class UserServiceCollectionExtensions
         services.AddUserPasswordCommands();
         services.AddUserRegistrationCommands();
         services.AddWebAuthnLoginCommands();
+        services.AddTdeOffboardingPasswordCommands();
     }
 
     public static void AddUserKeyCommands(this IServiceCollection services, IGlobalSettings globalSettings)
@@ -34,6 +36,11 @@ public static class UserServiceCollectionExtensions
         services.AddScoped<ISetInitialMasterPasswordCommand, SetInitialMasterPasswordCommand>();
     }
 
+    private static void AddTdeOffboardingPasswordCommands(this IServiceCollection services)
+    {
+        services.AddScoped<ITdeOffboardingPasswordCommand, TdeOffboardingPasswordCommand>();
+    }
+
     private static void AddUserRegistrationCommands(this IServiceCollection services)
     {
         services.AddScoped<ISendVerificationEmailForRegistrationCommand, SendVerificationEmailForRegistrationCommand>();
diff --git a/src/Core/Enums/EventType.cs b/src/Core/Enums/EventType.cs
index af3673f10..ed3fdb21d 100644
--- a/src/Core/Enums/EventType.cs
+++ b/src/Core/Enums/EventType.cs
@@ -14,6 +14,7 @@ public enum EventType : int
     User_UpdatedTempPassword = 1008,
     User_MigratedKeyToKeyConnector = 1009,
     User_RequestedDeviceApproval = 1010,
+    User_TdeOffboardingPasswordSet = 1011,
 
     Cipher_Created = 1100,
     Cipher_Updated = 1101,
diff --git a/src/Identity/IdentityServer/UserDecryptionOptionsBuilder.cs b/src/Identity/IdentityServer/UserDecryptionOptionsBuilder.cs
index b9fba5af2..77f822c49 100644
--- a/src/Identity/IdentityServer/UserDecryptionOptionsBuilder.cs
+++ b/src/Identity/IdentityServer/UserDecryptionOptionsBuilder.cs
@@ -95,8 +95,9 @@ public class UserDecryptionOptionsBuilder : IUserDecryptionOptionsBuilder
             return;
         }
 
-        var ssoConfigurationData = _ssoConfig.GetData();
-        if (ssoConfigurationData is not { MemberDecryptionType: MemberDecryptionType.TrustedDeviceEncryption })
+        var isTdeActive = _ssoConfig.GetData() is { MemberDecryptionType: MemberDecryptionType.TrustedDeviceEncryption };
+        var isTdeOffboarding = _user != null && !_user.HasMasterPassword() && _device != null && _device.IsTrusted() && !isTdeActive;
+        if (!isTdeActive && !isTdeOffboarding)
         {
             return;
         }
@@ -144,6 +145,7 @@ public class UserDecryptionOptionsBuilder : IUserDecryptionOptionsBuilder
             hasAdminApproval,
             hasLoginApprovingDevice,
             hasManageResetPasswordPermission,
+            isTdeOffboarding,
             encryptedPrivateKey,
             encryptedUserKey);
     }
diff --git a/test/Api.Test/Auth/Controllers/AccountsControllerTests.cs b/test/Api.Test/Auth/Controllers/AccountsControllerTests.cs
index d1911a0dc..a16a9cb55 100644
--- a/test/Api.Test/Auth/Controllers/AccountsControllerTests.cs
+++ b/test/Api.Test/Auth/Controllers/AccountsControllerTests.cs
@@ -12,6 +12,7 @@ using Bit.Core.AdminConsole.Services;
 using Bit.Core.Auth.Entities;
 using Bit.Core.Auth.Models.Api.Request.Accounts;
 using Bit.Core.Auth.Models.Data;
+using Bit.Core.Auth.UserFeatures.TdeOffboardingPassword.Interfaces;
 using Bit.Core.Auth.UserFeatures.UserKey;
 using Bit.Core.Auth.UserFeatures.UserMasterPassword.Interfaces;
 using Bit.Core.Billing.Services;
@@ -44,6 +45,7 @@ public class AccountsControllerTests : IDisposable
     private readonly IPolicyService _policyService;
     private readonly ISetInitialMasterPasswordCommand _setInitialMasterPasswordCommand;
     private readonly IRotateUserKeyCommand _rotateUserKeyCommand;
+    private readonly ITdeOffboardingPasswordCommand _tdeOffboardingPasswordCommand;
     private readonly IFeatureService _featureService;
     private readonly ISubscriberService _subscriberService;
     private readonly IReferenceEventService _referenceEventService;
@@ -72,6 +74,7 @@ public class AccountsControllerTests : IDisposable
         _policyService = Substitute.For<IPolicyService>();
         _setInitialMasterPasswordCommand = Substitute.For<ISetInitialMasterPasswordCommand>();
         _rotateUserKeyCommand = Substitute.For<IRotateUserKeyCommand>();
+        _tdeOffboardingPasswordCommand = Substitute.For<ITdeOffboardingPasswordCommand>();
         _featureService = Substitute.For<IFeatureService>();
         _subscriberService = Substitute.For<ISubscriberService>();
         _referenceEventService = Substitute.For<IReferenceEventService>();
@@ -97,6 +100,7 @@ public class AccountsControllerTests : IDisposable
             _userService,
             _policyService,
             _setInitialMasterPasswordCommand,
+            _tdeOffboardingPasswordCommand,
             _rotateUserKeyCommand,
             _featureService,
             _subscriberService,
diff --git a/test/Core.Test/Auth/UserFeatures/TdeOffboarding/TdeOffboardingPasswordCommandTests.cs b/test/Core.Test/Auth/UserFeatures/TdeOffboarding/TdeOffboardingPasswordCommandTests.cs
new file mode 100644
index 000000000..49558783f
--- /dev/null
+++ b/test/Core.Test/Auth/UserFeatures/TdeOffboarding/TdeOffboardingPasswordCommandTests.cs
@@ -0,0 +1,99 @@
+using Bit.Core.Auth.Entities;
+using Bit.Core.Auth.Enums;
+using Bit.Core.Auth.Repositories;
+using Bit.Core.Auth.UserFeatures.UserMasterPassword;
+using Bit.Core.Entities;
+using Bit.Core.Exceptions;
+using Bit.Core.Models.Data.Organizations.OrganizationUsers;
+using Bit.Core.Repositories;
+using Bit.Core.Services;
+using Bit.Test.Common.AutoFixture;
+using Bit.Test.Common.AutoFixture.Attributes;
+using Microsoft.AspNetCore.Identity;
+using NSubstitute;
+using Xunit;
+
+namespace Bit.Core.Test.Auth.UserFeatures.UserMasterPassword;
+
+[SutProviderCustomize]
+public class TdeOffboardingPasswordTests
+{
+    [Theory]
+    [BitAutoData]
+    public async Task TdeOffboardingPasswordCommand_Success(SutProvider<TdeOffboardingPasswordCommand> sutProvider,
+        User user, string masterPassword, string key, string hint, OrganizationUserOrganizationDetails orgUserDetails, SsoUser ssoUser)
+    {
+        // Arrange
+        user.MasterPassword = null;
+
+        sutProvider.GetDependency<IUserService>()
+            .UpdatePasswordHash(Arg.Any<User>(), Arg.Any<string>())
+            .Returns(IdentityResult.Success);
+
+        orgUserDetails.UseSso = true;
+        sutProvider.GetDependency<IOrganizationUserRepository>()
+            .GetManyDetailsByUserAsync(user.Id)
+            .Returns(new List<OrganizationUserOrganizationDetails> { orgUserDetails });
+
+        sutProvider.GetDependency<ISsoUserRepository>()
+            .GetByUserIdOrganizationIdAsync(orgUserDetails.OrganizationId, user.Id)
+            .Returns(ssoUser);
+
+        var ssoConfig = new SsoConfig();
+        var ssoConfigData = ssoConfig.GetData();
+        ssoConfigData.MemberDecryptionType = MemberDecryptionType.MasterPassword;
+        ssoConfig.SetData(ssoConfigData);
+        sutProvider.GetDependency<ISsoConfigRepository>()
+            .GetByOrganizationIdAsync(orgUserDetails.OrganizationId)
+            .Returns(ssoConfig);
+
+        // Act
+        var result = await sutProvider.Sut.UpdateTdeOffboardingPasswordAsync(user, masterPassword, key, hint);
+
+        // Assert
+        Assert.Equal(IdentityResult.Success, result);
+    }
+
+    [Theory]
+    [BitAutoData]
+    public async Task TdeOffboardingPasswordCommand_RejectWithTdeEnabled(SutProvider<TdeOffboardingPasswordCommand> sutProvider,
+        User user, string masterPassword, string key, string hint, OrganizationUserOrganizationDetails orgUserDetails, SsoUser ssoUser)
+    {
+        // Arrange
+        user.MasterPassword = null;
+
+        sutProvider.GetDependency<IUserService>()
+            .UpdatePasswordHash(Arg.Any<User>(), Arg.Any<string>(), true, false)
+            .Returns(IdentityResult.Success);
+
+        orgUserDetails.UseSso = true;
+        sutProvider.GetDependency<IOrganizationUserRepository>()
+            .GetManyDetailsByUserAsync(user.Id)
+            .Returns(new List<OrganizationUserOrganizationDetails> { orgUserDetails });
+
+        sutProvider.GetDependency<ISsoUserRepository>()
+            .GetByUserIdOrganizationIdAsync(orgUserDetails.OrganizationId, user.Id)
+            .Returns(ssoUser);
+
+        var ssoConfig = new SsoConfig();
+        var ssoConfigData = ssoConfig.GetData();
+        ssoConfigData.MemberDecryptionType = MemberDecryptionType.TrustedDeviceEncryption;
+        ssoConfig.SetData(ssoConfigData);
+        sutProvider.GetDependency<ISsoConfigRepository>()
+            .GetByOrganizationIdAsync(orgUserDetails.OrganizationId)
+            .Returns(ssoConfig);
+
+        await Assert.ThrowsAsync<BadRequestException>(() => sutProvider.Sut.UpdateTdeOffboardingPasswordAsync(user, masterPassword, key, hint));
+    }
+
+
+    [Theory]
+    [BitAutoData]
+    public async Task TdeOffboardingPasswordCommand_RejectWithMasterPassword(SutProvider<TdeOffboardingPasswordCommand> sutProvider,
+        User user, string masterPassword, string key, string hint)
+    {
+        // the user already has a master password, so the off-boarding request should fail, since off-boarding only applies to passwordless TDE users
+        await Assert.ThrowsAsync<BadRequestException>(() => sutProvider.Sut.UpdateTdeOffboardingPasswordAsync(user, masterPassword, key, hint));
+    }
+
+}
diff --git a/test/Identity.IntegrationTest/Endpoints/IdentityServerSsoTests.cs b/test/Identity.IntegrationTest/Endpoints/IdentityServerSsoTests.cs
index 1856ddb95..0a2514b23 100644
--- a/test/Identity.IntegrationTest/Endpoints/IdentityServerSsoTests.cs
+++ b/test/Identity.IntegrationTest/Endpoints/IdentityServerSsoTests.cs
@@ -178,6 +178,11 @@ public class IdentityServerSsoTests
             {
                 Assert.Equal("HasManageResetPasswordPermission", p.Name);
                 Assert.Equal(JsonValueKind.False, p.Value.ValueKind);
+            },
+            p =>
+            {
+                Assert.Equal("IsTdeOffboarding", p.Name);
+                Assert.Equal(JsonValueKind.False, p.Value.ValueKind);
             });
     }
 
@@ -219,6 +224,7 @@ public class IdentityServerSsoTests
         //     "HasAdminApproval": true,
         //     "HasLoginApprovingDevice": true,
         //     "HasManageResetPasswordPermission": false
+        //     "IsTdeOffboarding": false
         //   }
         // }
 
@@ -242,6 +248,11 @@ public class IdentityServerSsoTests
             {
                 Assert.Equal("HasManageResetPasswordPermission", p.Name);
                 Assert.Equal(JsonValueKind.False, p.Value.ValueKind);
+            },
+            p =>
+            {
+                Assert.Equal("IsTdeOffboarding", p.Name);
+                Assert.Equal(JsonValueKind.False, p.Value.ValueKind);
             });
     }