diff --git a/assets/rancher-aks-operator-crd/rancher-aks-operator-crd-103.0.0+up1.2.0-rc1.tgz b/assets/rancher-aks-operator-crd/rancher-aks-operator-crd-103.0.0+up1.2.0-rc1.tgz
new file mode 100644
index 0000000000..85f24a309c
Binary files /dev/null and b/assets/rancher-aks-operator-crd/rancher-aks-operator-crd-103.0.0+up1.2.0-rc1.tgz differ
diff --git a/assets/rancher-aks-operator/rancher-aks-operator-103.0.0+up1.2.0-rc1.tgz b/assets/rancher-aks-operator/rancher-aks-operator-103.0.0+up1.2.0-rc1.tgz
new file mode 100644
index 0000000000..93b26ba587
Binary files /dev/null and b/assets/rancher-aks-operator/rancher-aks-operator-103.0.0+up1.2.0-rc1.tgz differ
diff --git a/charts/rancher-aks-operator-crd/103.0.0+up1.2.0-rc1/Chart.yaml b/charts/rancher-aks-operator-crd/103.0.0+up1.2.0-rc1/Chart.yaml
new file mode 100644
index 0000000000..dbaef5c504
--- /dev/null
+++ b/charts/rancher-aks-operator-crd/103.0.0+up1.2.0-rc1/Chart.yaml
@@ -0,0 +1,12 @@
+annotations:
+  catalog.cattle.io/certified: rancher
+  catalog.cattle.io/hidden: "true"
+  catalog.cattle.io/namespace: cattle-system
+  catalog.cattle.io/os: linux
+  catalog.cattle.io/permits-os: linux,windows
+  catalog.cattle.io/release-name: rancher-aks-operator-crd
+apiVersion: v2
+appVersion: 1.2.0-rc1
+description: AKS Operator CustomResourceDefinitions
+name: rancher-aks-operator-crd
+version: 103.0.0+up1.2.0-rc1
diff --git a/charts/rancher-aks-operator-crd/103.0.0+up1.2.0-rc1/templates/crds.yaml b/charts/rancher-aks-operator-crd/103.0.0+up1.2.0-rc1/templates/crds.yaml
new file mode 100644
index 0000000000..c4fcdfac05
--- /dev/null
+++ b/charts/rancher-aks-operator-crd/103.0.0+up1.2.0-rc1/templates/crds.yaml
@@ -0,0 +1,211 @@
+apiVersion: apiextensions.k8s.io/v1
+kind: CustomResourceDefinition
+metadata:
+  annotations:
+    helm.sh/resource-policy: keep
+  name: aksclusterconfigs.aks.cattle.io
+spec:
+  group: aks.cattle.io
+  names:
+    kind: AKSClusterConfig
+    plural: aksclusterconfigs
+    shortNames:
+    - akscc
+    singular: aksclusterconfig
+  preserveUnknownFields: false
+  scope: Namespaced
+  versions:
+  - name: v1
+    schema:
+      openAPIV3Schema:
+        properties:
+          spec:
+            properties:
+              authBaseUrl:
+                nullable: true
+                type: string
+              authorizedIpRanges:
+                items:
+                  nullable: true
+                  type: string
+                nullable: true
+                type: array
+              azureCredentialSecret:
+                nullable: true
+                type: string
+              baseUrl:
+                nullable: true
+                type: string
+              clusterName:
+                nullable: true
+                type: string
+              dnsPrefix:
+                nullable: true
+                type: string
+              dnsServiceIp:
+                nullable: true
+                type: string
+              dockerBridgeCidr:
+                nullable: true
+                type: string
+              httpApplicationRouting:
+                nullable: true
+                type: boolean
+              imported:
+                type: boolean
+              kubernetesVersion:
+                nullable: true
+                type: string
+              linuxAdminUsername:
+                nullable: true
+                type: string
+              loadBalancerSku:
+                nullable: true
+                type: string
+              logAnalyticsWorkspaceGroup:
+                nullable: true
+                type: string
+              logAnalyticsWorkspaceName:
+                nullable: true
+                type: string
+              managedIdentity:
+                nullable: true
+                type: boolean
+              monitoring:
+                nullable: true
+                type: boolean
+              networkPlugin:
+                nullable: true
+                type: string
+              networkPolicy:
+                nullable: true
+                type: string
+              nodePools:
+                items:
+                  properties:
+                    availabilityZones:
+                      items:
+                        nullable: true
+                        type: string
+                      nullable: true
+                      type: array
+                    count:
+                      nullable: true
+                      type: integer
+                    enableAutoScaling:
+                      nullable: true
+                      type: boolean
+                    maxCount:
+                      nullable: true
+                      type: integer
+                    maxPods:
+                      nullable: true
+                      type: integer
+                    maxSurge:
+                      nullable: true
+                      type: string
+                    minCount:
+                      nullable: true
+                      type: integer
+                    mode:
+                      nullable: true
+                      type: string
+                    name:
+                      nullable: true
+                      type: string
+                    nodeLabels:
+                      additionalProperties:
+                        nullable: true
+                        type: string
+                      nullable: true
+                      type: object
+                    nodeTaints:
+                      items:
+                        nullable: true
+                        type: string
+                      nullable: true
+                      type: array
+                    orchestratorVersion:
+                      nullable: true
+                      type: string
+                    osDiskSizeGB:
+                      nullable: true
+                      type: integer
+                    osDiskType:
+                      nullable: true
+                      type: string
+                    osType:
+                      nullable: true
+                      type: string
+                    vmSize:
+                      nullable: true
+                      type: string
+                    vnetSubnetID:
+                      nullable: true
+                      type: string
+                  type: object
+                nullable: true
+                type: array
+              nodeResourceGroup:
+                nullable: true
+                type: string
+              outboundType:
+                nullable: true
+                type: string
+              podCidr:
+                nullable: true
+                type: string
+              privateCluster:
+                nullable: true
+                type: boolean
+              privateDnsZone:
+                nullable: true
+                type: string
+              resourceGroup:
+                nullable: true
+                type: string
+              resourceLocation:
+                nullable: true
+                type: string
+              serviceCidr:
+                nullable: true
+                type: string
+              sshPublicKey:
+                nullable: true
+                type: string
+              subnet:
+                nullable: true
+                type: string
+              tags:
+                additionalProperties:
+                  nullable: true
+                  type: string
+                nullable: true
+                type: object
+              userAssignedIdentity:
+                nullable: true
+                type: string
+              virtualNetwork:
+                nullable: true
+                type: string
+              virtualNetworkResourceGroup:
+                nullable: true
+                type: string
+            type: object
+          status:
+            properties:
+              failureMessage:
+                nullable: true
+                type: string
+              phase:
+                nullable: true
+                type: string
+              rbacEnabled:
+                nullable: true
+                type: boolean
+            type: object
+        type: object
+    served: true
+    storage: true
+    subresources:
+      status: {}
diff --git a/charts/rancher-aks-operator/103.0.0+up1.2.0-rc1/Chart.yaml b/charts/rancher-aks-operator/103.0.0+up1.2.0-rc1/Chart.yaml
new file mode 100644
index 0000000000..7330f8afcf
--- /dev/null
+++ b/charts/rancher-aks-operator/103.0.0+up1.2.0-rc1/Chart.yaml
@@ -0,0 +1,20 @@
+annotations:
+  catalog.cattle.io/auto-install: rancher-aks-operator-crd=match
+  catalog.cattle.io/certified: rancher
+  catalog.cattle.io/hidden: "true"
+  catalog.cattle.io/kube-version: '>= 1.20.0-0 < 1.28.0-0'
+  catalog.cattle.io/namespace: cattle-system
+  catalog.cattle.io/os: linux
+  catalog.cattle.io/permits-os: linux,windows
+  catalog.cattle.io/provides-gvr: aksclusterconfigs.aks.cattle.io/v1
+  catalog.cattle.io/rancher-version: '>= 2.8.0-0 < 2.9.0-0'
+  catalog.cattle.io/release-name: rancher-aks-operator
+  catalog.cattle.io/scope: management
+apiVersion: v2
+appVersion: 1.2.0-rc1
+description: A Helm chart for provisioning AKS clusters
+home: https://github.com/rancher/aks-operator
+name: rancher-aks-operator
+sources:
+- https://github.com/rancher/aks-operator
+version: 103.0.0+up1.2.0-rc1
diff --git a/charts/rancher-aks-operator/103.0.0+up1.2.0-rc1/templates/NOTES.txt b/charts/rancher-aks-operator/103.0.0+up1.2.0-rc1/templates/NOTES.txt
new file mode 100644
index 0000000000..5ba05b482c
--- /dev/null
+++ b/charts/rancher-aks-operator/103.0.0+up1.2.0-rc1/templates/NOTES.txt
@@ -0,0 +1,4 @@
+You have deployed the Rancher AKS operator
+Version: {{ .Chart.AppVersion }}
+Description: This operator provisions AKS clusters
+from AKSClusterConfig CRs.
diff --git a/charts/rancher-aks-operator/103.0.0+up1.2.0-rc1/templates/_helpers.tpl b/charts/rancher-aks-operator/103.0.0+up1.2.0-rc1/templates/_helpers.tpl
new file mode 100644
index 0000000000..de3b332f6a
--- /dev/null
+++ b/charts/rancher-aks-operator/103.0.0+up1.2.0-rc1/templates/_helpers.tpl
@@ -0,0 +1,25 @@
+{{/* vim: set filetype=mustache: */}}
+
+{{- define "system_default_registry" -}}
+{{- if .Values.global.cattle.systemDefaultRegistry -}}
+{{- printf "%s/" .Values.global.cattle.systemDefaultRegistry -}}
+{{- else -}}
+{{- "" -}}
+{{- end -}}
+{{- end -}}
+
+{{/*
+Windows cluster will add default taint for linux nodes,
+add below linux tolerations to workloads could be scheduled to those linux nodes
+*/}}
+{{- define "linux-node-tolerations" -}}
+- key: "cattle.io/os"
+  value: "linux"
+  effect: "NoSchedule"
+  operator: "Equal"
+{{- end -}}
+
+{{- define "linux-node-selector" -}}
+kubernetes.io/os: linux
+{{- end -}}
+
diff --git a/charts/rancher-aks-operator/103.0.0+up1.2.0-rc1/templates/clusterrole.yaml b/charts/rancher-aks-operator/103.0.0+up1.2.0-rc1/templates/clusterrole.yaml
new file mode 100644
index 0000000000..5e2ce97567
--- /dev/null
+++ b/charts/rancher-aks-operator/103.0.0+up1.2.0-rc1/templates/clusterrole.yaml
@@ -0,0 +1,15 @@
+kind: ClusterRole
+apiVersion: rbac.authorization.k8s.io/v1
+metadata:
+  name: aks-operator
+  namespace: cattle-system
+rules:
+  - apiGroups: ['']
+    resources: ['secrets']
+    verbs: ['get', 'list', 'create', 'watch', 'update']
+  - apiGroups: ['aks.cattle.io']
+    resources: ['aksclusterconfigs']
+    verbs: ['get', 'list', 'update', 'watch']
+  - apiGroups: ['aks.cattle.io']
+    resources: ['aksclusterconfigs/status']
+    verbs: ['update']
diff --git a/charts/rancher-aks-operator/103.0.0+up1.2.0-rc1/templates/clusterrolebinding.yaml b/charts/rancher-aks-operator/103.0.0+up1.2.0-rc1/templates/clusterrolebinding.yaml
new file mode 100644
index 0000000000..7aa7e785a4
--- /dev/null
+++ b/charts/rancher-aks-operator/103.0.0+up1.2.0-rc1/templates/clusterrolebinding.yaml
@@ -0,0 +1,13 @@
+apiVersion: rbac.authorization.k8s.io/v1
+kind: ClusterRoleBinding
+metadata:
+  name:  aks-operator
+  namespace: cattle-system
+roleRef:
+  apiGroup: rbac.authorization.k8s.io
+  kind: ClusterRole
+  name: aks-operator
+subjects:
+- kind: ServiceAccount
+  name: aks-operator
+  namespace: cattle-system
diff --git a/charts/rancher-aks-operator/103.0.0+up1.2.0-rc1/templates/deployment.yaml b/charts/rancher-aks-operator/103.0.0+up1.2.0-rc1/templates/deployment.yaml
new file mode 100644
index 0000000000..1d85eb18c8
--- /dev/null
+++ b/charts/rancher-aks-operator/103.0.0+up1.2.0-rc1/templates/deployment.yaml
@@ -0,0 +1,61 @@
+apiVersion: apps/v1
+kind: Deployment
+metadata:
+  name: aks-config-operator
+  namespace: cattle-system
+spec:
+  replicas: 1
+  selector:
+    matchLabels:
+      ke.cattle.io/operator: aks
+  template:
+    metadata:
+      labels:
+        ke.cattle.io/operator: aks
+    spec:
+      nodeSelector: {{ include "linux-node-selector" . | nindent 8 }}
+{{- if .Values.nodeSelector }}
+{{ toYaml .Values.nodeSelector | indent 8 }}
+{{- end }}
+      tolerations: {{ include "linux-node-tolerations" . | nindent 8 }}
+{{- if .Values.tolerations }}
+{{ toYaml .Values.tolerations | indent 8 }}
+{{- end }}
+      serviceAccountName: aks-operator
+      {{- if .Values.priorityClassName }}
+      priorityClassName: "{{.Values.priorityClassName}}"
+      {{- end }}
+      securityContext:
+        fsGroup: 1007
+        runAsUser: 1007
+      containers:
+      - name: aks-operator
+        image: {{ template "system_default_registry" . }}{{ .Values.aksOperator.image.repository }}:{{ .Values.aksOperator.image.tag }}
+        imagePullPolicy: IfNotPresent
+        env:
+        - name: HTTP_PROXY
+          value: {{ .Values.httpProxy }}
+        - name: HTTPS_PROXY
+          value: {{ .Values.httpsProxy }}
+        - name: NO_PROXY
+          value: {{ .Values.noProxy }}
+{{- if .Values.additionalTrustedCAs }}
+        # aks-operator mounts the additional CAs in two places:
+        volumeMounts:
+            # This directory is owned by the aks-operator user so c_rehash works here.
+          - mountPath: /etc/rancher/ssl/ca-additional.pem
+            name: tls-ca-additional-volume
+            subPath: ca-additional.pem
+            readOnly: true
+            # This directory is root-owned so c_rehash doesn't work here,
+            # but the cert is here in case update-ca-certificates is called in the future or by the OS.
+          - mountPath: /etc/pki/trust/anchors/ca-additional.pem
+            name: tls-ca-additional-volume
+            subPath: ca-additional.pem
+            readOnly: true
+      volumes:
+        - name: tls-ca-additional-volume
+          secret:
+            defaultMode: 0400
+            secretName: tls-ca-additional
+  {{- end }}
diff --git a/charts/rancher-aks-operator/103.0.0+up1.2.0-rc1/templates/serviceaccount.yaml b/charts/rancher-aks-operator/103.0.0+up1.2.0-rc1/templates/serviceaccount.yaml
new file mode 100644
index 0000000000..9c40a152f5
--- /dev/null
+++ b/charts/rancher-aks-operator/103.0.0+up1.2.0-rc1/templates/serviceaccount.yaml
@@ -0,0 +1,5 @@
+apiVersion: v1
+kind: ServiceAccount
+metadata:
+  namespace: cattle-system
+  name: aks-operator
diff --git a/charts/rancher-aks-operator/103.0.0+up1.2.0-rc1/values.yaml b/charts/rancher-aks-operator/103.0.0+up1.2.0-rc1/values.yaml
new file mode 100644
index 0000000000..619dcdbd4b
--- /dev/null
+++ b/charts/rancher-aks-operator/103.0.0+up1.2.0-rc1/values.yaml
@@ -0,0 +1,23 @@
+global:
+  cattle:
+    systemDefaultRegistry: ""
+
+aksOperator:
+  image:
+    repository: rancher/aks-operator
+    tag: v1.2.0-rc1
+
+httpProxy: ""
+httpsProxy: ""
+noProxy: ""
+additionalTrustedCAs: false
+
+## Node labels for pod assignment
+## Ref: https://kubernetes.io/docs/user-guide/node-selection/
+##
+nodeSelector: {}
+## List of node taints to tolerate (requires Kubernetes >= 1.6)
+tolerations: []
+
+## PriorityClassName assigned to deployment.
+priorityClassName: ""
diff --git a/index.yaml b/index.yaml
index f23fb98508..f37d7d0143 100755
--- a/index.yaml
+++ b/index.yaml
@@ -4641,6 +4641,30 @@ entries:
     - assets/prometheus-federator/prometheus-federator-0.1.0.tgz
     version: 0.1.0
   rancher-aks-operator:
+  - annotations:
+      catalog.cattle.io/auto-install: rancher-aks-operator-crd=match
+      catalog.cattle.io/certified: rancher
+      catalog.cattle.io/hidden: "true"
+      catalog.cattle.io/kube-version: '>= 1.20.0-0 < 1.28.0-0'
+      catalog.cattle.io/namespace: cattle-system
+      catalog.cattle.io/os: linux
+      catalog.cattle.io/permits-os: linux,windows
+      catalog.cattle.io/provides-gvr: aksclusterconfigs.aks.cattle.io/v1
+      catalog.cattle.io/rancher-version: '>= 2.8.0-0 < 2.9.0-0'
+      catalog.cattle.io/release-name: rancher-aks-operator
+      catalog.cattle.io/scope: management
+    apiVersion: v2
+    appVersion: 1.2.0-rc1
+    created: "2023-08-22T11:32:33.716651+03:00"
+    description: A Helm chart for provisioning AKS clusters
+    digest: d116445e5f79e3940902e3dd81680f662618e91dfd60f14921eaa049d52430ea
+    home: https://github.com/rancher/aks-operator
+    name: rancher-aks-operator
+    sources:
+    - https://github.com/rancher/aks-operator
+    urls:
+    - assets/rancher-aks-operator/rancher-aks-operator-103.0.0+up1.2.0-rc1.tgz
+    version: 103.0.0+up1.2.0-rc1
   - annotations:
       catalog.cattle.io/auto-install: rancher-aks-operator-crd=match
       catalog.cattle.io/certified: rancher
@@ -4927,6 +4951,22 @@ entries:
     - assets/rancher-aks-operator/rancher-aks-operator-100.0.0+up1.0.1.tgz
     version: 100.0.0+up1.0.1
   rancher-aks-operator-crd:
+  - annotations:
+      catalog.cattle.io/certified: rancher
+      catalog.cattle.io/hidden: "true"
+      catalog.cattle.io/namespace: cattle-system
+      catalog.cattle.io/os: linux
+      catalog.cattle.io/permits-os: linux,windows
+      catalog.cattle.io/release-name: rancher-aks-operator-crd
+    apiVersion: v2
+    appVersion: 1.2.0-rc1
+    created: "2023-08-22T11:32:35.184311+03:00"
+    description: AKS Operator CustomResourceDefinitions
+    digest: a2442f52f73988d3eead4b8432739f9ed516100ff1be69e3e93685caf1d05de4
+    name: rancher-aks-operator-crd
+    urls:
+    - assets/rancher-aks-operator-crd/rancher-aks-operator-crd-103.0.0+up1.2.0-rc1.tgz
+    version: 103.0.0+up1.2.0-rc1
   - annotations:
       catalog.cattle.io/certified: rancher
       catalog.cattle.io/hidden: "true"
diff --git a/packages/rancher-aks-operator/rancher-aks-operator-crd/package.yaml b/packages/rancher-aks-operator/rancher-aks-operator-crd/package.yaml
index f434888a8a..e8905ed4bf 100644
--- a/packages/rancher-aks-operator/rancher-aks-operator-crd/package.yaml
+++ b/packages/rancher-aks-operator/rancher-aks-operator-crd/package.yaml
@@ -1,3 +1,3 @@
-url: https://github.com/rancher/aks-operator/releases/download/v1.1.2/rancher-aks-operator-crd-1.1.2.tgz
+url: https://github.com/rancher/aks-operator/releases/download/v1.2.0-rc1/rancher-aks-operator-crd-1.2.0-rc1.tgz
 version: 103.0.0
-doNotRelease: true
+doNotRelease: false
diff --git a/packages/rancher-aks-operator/rancher-aks-operator/generated-changes/patch/Chart.yaml.patch b/packages/rancher-aks-operator/rancher-aks-operator/generated-changes/patch/Chart.yaml.patch
index 98c810cbff..2398d32c2b 100644
--- a/packages/rancher-aks-operator/rancher-aks-operator/generated-changes/patch/Chart.yaml.patch
+++ b/packages/rancher-aks-operator/rancher-aks-operator/generated-changes/patch/Chart.yaml.patch
@@ -5,7 +5,7 @@
    catalog.cattle.io/certified: rancher
    catalog.cattle.io/hidden: "true"
 -  catalog.cattle.io/kube-version: '>= 1.18.0-0'
-+  catalog.cattle.io/kube-version: '>= 1.20.0-0 < 1.27.0-0'
++  catalog.cattle.io/kube-version: '>= 1.20.0-0 < 1.28.0-0'
    catalog.cattle.io/namespace: cattle-system
    catalog.cattle.io/os: linux
    catalog.cattle.io/permits-os: linux,windows
diff --git a/packages/rancher-aks-operator/rancher-aks-operator/package.yaml b/packages/rancher-aks-operator/rancher-aks-operator/package.yaml
index 1629d7321e..05bfe05792 100644
--- a/packages/rancher-aks-operator/rancher-aks-operator/package.yaml
+++ b/packages/rancher-aks-operator/rancher-aks-operator/package.yaml
@@ -1,3 +1,3 @@
-url: https://github.com/rancher/aks-operator/releases/download/v1.1.2/rancher-aks-operator-1.1.2.tgz
+url: https://github.com/rancher/aks-operator/releases/download/v1.2.0-rc1/rancher-aks-operator-1.2.0-rc1.tgz
 version: 103.0.0
-doNotRelease: true
+doNotRelease: false
diff --git a/release.yaml b/release.yaml
index 7fed2a4083..c181497f35 100644
--- a/release.yaml
+++ b/release.yaml
@@ -10,3 +10,7 @@ fleet-crd:
   - 102.1.1+up0.7.1
 rancher-webhook:
   - 103.0.0+up0.4.0-rc2
+rancher-aks-operator:
+- 103.0.0+up1.2.0-rc1
+rancher-aks-operator-crd:
+- 103.0.0+up1.2.0-rc1