diff --git a/plugins/hypervisors/kvm/src/main/java/com/cloud/hypervisor/kvm/storage/LibvirtStorageAdaptor.java b/plugins/hypervisors/kvm/src/main/java/com/cloud/hypervisor/kvm/storage/LibvirtStorageAdaptor.java
index c949d0882479..85d9d36c3bbd 100644
--- a/plugins/hypervisors/kvm/src/main/java/com/cloud/hypervisor/kvm/storage/LibvirtStorageAdaptor.java
+++ b/plugins/hypervisors/kvm/src/main/java/com/cloud/hypervisor/kvm/storage/LibvirtStorageAdaptor.java
@@ -918,11 +918,15 @@ public KVMStoragePool createStoragePool(String name, String host, int port, Stri
             throw new CloudRuntimeException("Failed to create storage pool: " + name);
         }
 
+        boolean refCountIncremented = false;
+        boolean operationSucceeded = false;
+
         try {
             if (!isPrimaryStorage) {
                 // only ref count storage pools for secondary storage, as primary storage is assumed
                 // to be always mounted, as long the primary storage isn't fully deleted.
                 incStoragePoolRefCount(name);
+                refCountIncremented = true;
             }
 
             if (sp.isActive() == 0) {
@@ -934,17 +938,24 @@ public KVMStoragePool createStoragePool(String name, String host, int port, Stri
                 checkNetfsStoragePoolMounted(name);
             }
 
-            return getStoragePool(name);
+            KVMStoragePool storagePool = getStoragePool(name);
+            operationSucceeded = true;
+            return storagePool;
+
         } catch (LibvirtException e) {
-            decStoragePoolRefCount(name);
             String error = e.toString();
             if (error.contains("Storage source conflict")) {
                 throw new CloudRuntimeException("A pool matching this location already exists in libvirt, " +
-                        " but has a different UUID/Name. Cannot create new pool without first " + " removing it. Check for inactive pools via 'virsh pool-list --all'. " +
+                        " but has a different UUID/Name. Cannot create new pool without first " +
+                        " removing it. Check for inactive pools via 'virsh pool-list --all'. " +
                         error);
             } else {
                 throw new CloudRuntimeException(error);
             }
+        } finally {
+            if (refCountIncremented && !operationSucceeded) {
+                decStoragePoolRefCount(name);
+            }
         }
     }
 
diff --git a/plugins/hypervisors/kvm/src/test/java/com/cloud/hypervisor/kvm/storage/LibvirtStorageAdaptorTest.java b/plugins/hypervisors/kvm/src/test/java/com/cloud/hypervisor/kvm/storage/LibvirtStorageAdaptorTest.java
index 88346abd0176..f2ef7781c558 100644
--- a/plugins/hypervisors/kvm/src/test/java/com/cloud/hypervisor/kvm/storage/LibvirtStorageAdaptorTest.java
+++ b/plugins/hypervisors/kvm/src/test/java/com/cloud/hypervisor/kvm/storage/LibvirtStorageAdaptorTest.java
@@ -27,6 +27,7 @@
 import java.util.UUID;
 
 import org.junit.After;
+import org.junit.Assert;
 import org.junit.Before;
 import org.junit.Test;
 import org.junit.runner.RunWith;
@@ -176,4 +177,38 @@ public void testUpdateLocalPoolIops_NullResultFromScript() {
 
         Mockito.verify(mockPool, never()).setUsedIops(anyLong());
     }
+    @Test
+    public void testCreateStoragePoolDecrementsRefCountWhenGetStoragePoolFails() throws Exception {
+        String uuid = String.valueOf(UUID.randomUUID());
+
+        Connect conn = Mockito.mock(Connect.class);
+        StoragePool sp = Mockito.mock(StoragePool.class);
+
+        Mockito.when(LibvirtConnection.getConnection()).thenReturn(conn);
+        Mockito.when(conn.storagePoolLookupByUUIDString(uuid)).thenReturn(sp);
+        Mockito.when(sp.isActive()).thenReturn(1);
+
+        LibvirtStorageAdaptor adaptor = Mockito.spy(new LibvirtStorageAdaptor(null));
+
+        Mockito.doThrow(new CloudRuntimeException("Simulated storage pool failure"))
+                .when(adaptor).getStoragePool(uuid);
+
+        try {
+            adaptor.createStoragePoolLocked(
+                    uuid,
+                    "127.0.0.1",
+                    0,
+                    "/export/secondary",
+                    null,
+                    Storage.StoragePoolType.Filesystem,
+                    null,
+                    false
+            );
+
+            Assert.fail("Expected CloudRuntimeException");
+        } catch (CloudRuntimeException expected) {
+            Mockito.verify(adaptor).incStoragePoolRefCount(uuid);
+            Mockito.verify(adaptor).decStoragePoolRefCount(uuid);
+        }
+    }
 }