diff --git a/archinstall/lib/args.py b/archinstall/lib/args.py
index ea9ead6af8..19e6050c25 100644
--- a/archinstall/lib/args.py
+++ b/archinstall/lib/args.py
@@ -76,7 +76,6 @@ class ArchConfig:
 
 	# Special fields that should be handle with care due to security implications
 	users: list[User] = field(default_factory=list)
-	disk_encryption: DiskEncryption | None = None
 	root_enc_password: Password | None = None
 
 	def unsafe_json(self) -> dict[str, Any]:
@@ -85,8 +84,10 @@ def unsafe_json(self) -> dict[str, Any]:
 			'root_enc_password': self.root_enc_password.enc_password if self.root_enc_password else None,
 		}
 
-		if self.disk_encryption and self.disk_encryption.encryption_password:
-			config['encryption_password'] = self.disk_encryption.encryption_password.plaintext
+		if self.disk_config:
+			disk_encryption = self.disk_config.disk_encryption
+			if disk_encryption and disk_encryption.encryption_password:
+				config['encryption_password'] = disk_encryption.encryption_password.plaintext
 
 		return config
 
@@ -113,9 +114,6 @@ def safe_json(self) -> dict[str, Any]:
 		if self.disk_config:
 			config['disk_config'] = self.disk_config.json()
 
-		if self.disk_encryption:
-			config['disk_encryption'] = self.disk_encryption.json()
-
 		if self.profile_config:
 			config['profile_config'] = self.profile_config.json()
 
@@ -137,7 +135,23 @@ def from_config(cls, args_config: dict[str, Any]) -> 'ArchConfig':
 			arch_config.archinstall_language = translation_handler.get_language_by_name(archinstall_lang)
 
 		if disk_config := args_config.get('disk_config', {}):
-			arch_config.disk_config = DiskLayoutConfiguration.parse_arg(disk_config)
+			enc_password = args_config.get('encryption_password', '')
+			password = Password(plaintext=enc_password) if enc_password else None
+			arch_config.disk_config = DiskLayoutConfiguration.parse_arg(disk_config, password)
+
+			# DEPRECATED
+			# backwards compatibility for main level disk_encryption entry
+			disk_encryption: DiskEncryption | None = None
+
+			if args_config.get('disk_encryption', None) is not None and arch_config.disk_config is not None:
+				disk_encryption = DiskEncryption.parse_arg(
+					arch_config.disk_config,
+					args_config['disk_encryption'],
+					Password(plaintext=args_config.get('encryption_password', '')),
+				)
+
+				if disk_encryption:
+					arch_config.disk_config.disk_encryption = disk_encryption
 
 		if profile_config := args_config.get('profile_config', None):
 			arch_config.profile_config = ProfileConfiguration.parse_arg(profile_config)
@@ -171,13 +185,6 @@ def from_config(cls, args_config: dict[str, Any]) -> 'ArchConfig':
 		if audio_config := args_config.get('audio_config', None):
 			arch_config.audio_config = AudioConfiguration.parse_arg(audio_config)
 
-		if args_config.get('disk_encryption', None) is not None and arch_config.disk_config is not None:
-			arch_config.disk_encryption = DiskEncryption.parse_arg(
-				arch_config.disk_config,
-				args_config['disk_encryption'],
-				Password(plaintext=args_config.get('encryption_password', '')),
-			)
-
 		if hostname := args_config.get('hostname', ''):
 			arch_config.hostname = hostname
 
diff --git a/archinstall/lib/disk/disk_menu.py b/archinstall/lib/disk/disk_menu.py
index 24affcc5ad..77a32b7a62 100644
--- a/archinstall/lib/disk/disk_menu.py
+++ b/archinstall/lib/disk/disk_menu.py
@@ -1,10 +1,13 @@
 from dataclasses import dataclass
 from typing import override
 
+from archinstall.lib.disk.encryption_menu import DiskEncryptionMenu
 from archinstall.lib.models.device_model import (
 	BtrfsOptions,
+	DiskEncryption,
 	DiskLayoutConfiguration,
 	DiskLayoutType,
+	EncryptionType,
 	LvmConfiguration,
 	SnapshotConfig,
 	SnapshotType,
@@ -25,6 +28,7 @@ class DiskMenuConfig:
 	disk_config: DiskLayoutConfiguration | None
 	lvm_config: LvmConfiguration | None
 	btrfs_snapshot_config: SnapshotConfig | None
+	disk_encryption: DiskEncryption | None
 
 
 class DiskLayoutConfigurationMenu(AbstractSubMenu[DiskLayoutConfiguration]):
@@ -34,6 +38,7 @@ def __init__(self, disk_layout_config: DiskLayoutConfiguration | None):
 				disk_config=None,
 				lvm_config=None,
 				btrfs_snapshot_config=None,
+				disk_encryption=None,
 			)
 		else:
 			snapshot_config = disk_layout_config.btrfs_options.snapshot_config if disk_layout_config.btrfs_options else None
@@ -41,6 +46,7 @@ def __init__(self, disk_layout_config: DiskLayoutConfiguration | None):
 			self._disk_menu_config = DiskMenuConfig(
 				disk_config=disk_layout_config,
 				lvm_config=disk_layout_config.lvm_config,
+				disk_encryption=disk_layout_config.disk_encryption,
 				btrfs_snapshot_config=snapshot_config,
 			)
 
@@ -70,6 +76,13 @@ def _define_menu_options(self) -> list[MenuItem]:
 				dependencies=[self._check_dep_lvm],
 				key='lvm_config',
 			),
+			MenuItem(
+				text=tr('Disk encryption'),
+				action=self._disk_encryption,
+				preview_action=self._prev_disk_encryption,
+				dependencies=['disk_config'],
+				key='disk_encryption',
+			),
 			MenuItem(
 				text='Btrfs snapshots',
 				action=self._select_btrfs_snapshots,
@@ -87,6 +100,7 @@ def run(self) -> DiskLayoutConfiguration | None:
 		if self._disk_menu_config.disk_config:
 			self._disk_menu_config.disk_config.lvm_config = self._disk_menu_config.lvm_config
 			self._disk_menu_config.disk_config.btrfs_options = BtrfsOptions(snapshot_config=self._disk_menu_config.btrfs_snapshot_config)
+			self._disk_menu_config.disk_config.disk_encryption = self._disk_menu_config.disk_encryption
 			return self._disk_menu_config.disk_config
 
 		return None
@@ -107,11 +121,25 @@ def _check_dep_btrfs(self) -> bool:
 
 		return False
 
+	def _disk_encryption(self, preset: DiskEncryption | None) -> DiskEncryption | None:
+		disk_config: DiskLayoutConfiguration | None = self._item_group.find_by_key('disk_config').value
+
+		if not disk_config:
+			# this should not happen as the encryption menu has the disk_config as dependency
+			raise ValueError('No disk layout specified')
+
+		if not DiskEncryption.validate_enc(disk_config):
+			return None
+
+		disk_encryption = DiskEncryptionMenu(disk_config, preset=preset).run()
+		return disk_encryption
+
 	def _select_disk_layout_config(self, preset: DiskLayoutConfiguration | None) -> DiskLayoutConfiguration | None:
 		disk_config = select_disk_config(preset)
 
 		if disk_config != preset:
 			self._menu_item_group.find_by_key('lvm_config').value = None
+			self._menu_item_group.find_by_key('disk_encryption').value = None
 
 		return disk_config
 
@@ -217,3 +245,29 @@ def _prev_btrfs_snapshots(self, item: MenuItem) -> str | None:
 
 		snapshot_config: SnapshotConfig = item.value
 		return tr('Snapshot type: {}').format(snapshot_config.snapshot_type.value)
+
+	def _prev_disk_encryption(self, item: MenuItem) -> str | None:
+		disk_config: DiskLayoutConfiguration | None = self._item_group.find_by_key('disk_config').value
+		enc_config: DiskEncryption | None = item.value
+
+		if disk_config and not DiskEncryption.validate_enc(disk_config):
+			return tr('LVM disk encryption with more than 2 partitions is currently not supported')
+
+		if enc_config:
+			enc_type = EncryptionType.type_to_text(enc_config.encryption_type)
+			output = tr('Encryption type') + f': {enc_type}\n'
+
+			if enc_config.encryption_password:
+				output += tr('Password') + f': {enc_config.encryption_password.hidden()}\n'
+
+			if enc_config.partitions:
+				output += f'Partitions: {len(enc_config.partitions)} selected\n'
+			elif enc_config.lvm_volumes:
+				output += f'LVM volumes: {len(enc_config.lvm_volumes)} selected\n'
+
+			if enc_config.hsm_device:
+				output += f'HSM: {enc_config.hsm_device.manufacturer}'
+
+			return output
+
+		return None
diff --git a/archinstall/lib/disk/filesystem.py b/archinstall/lib/disk/filesystem.py
index 77d539e534..3726606a68 100644
--- a/archinstall/lib/disk/filesystem.py
+++ b/archinstall/lib/disk/filesystem.py
@@ -27,13 +27,9 @@
 
 
 class FilesystemHandler:
-	def __init__(
-		self,
-		disk_config: DiskLayoutConfiguration,
-		enc_conf: DiskEncryption | None = None,
-	):
+	def __init__(self, disk_config: DiskLayoutConfiguration):
 		self._disk_config = disk_config
-		self._enc_config = enc_conf
+		self._enc_config = disk_config.disk_encryption
 
 	def perform_filesystem_operations(self, show_countdown: bool = True) -> None:
 		if self._disk_config.config_type == DiskLayoutType.Pre_mount:
diff --git a/archinstall/lib/global_menu.py b/archinstall/lib/global_menu.py
index 7ecd43a4c7..25be5bd7a8 100644
--- a/archinstall/lib/global_menu.py
+++ b/archinstall/lib/global_menu.py
@@ -3,8 +3,7 @@
 from typing import override
 
 from archinstall.lib.disk.disk_menu import DiskLayoutConfigurationMenu
-from archinstall.lib.disk.encryption_menu import DiskEncryptionMenu
-from archinstall.lib.models.device_model import DiskEncryption, DiskLayoutConfiguration, DiskLayoutType, EncryptionType, FilesystemType, PartitionModification
+from archinstall.lib.models.device_model import DiskLayoutConfiguration, DiskLayoutType, EncryptionType, FilesystemType, PartitionModification
 from archinstall.lib.packages import list_available_packages
 from archinstall.tui.menu_item import MenuItem, MenuItemGroup
 
@@ -79,13 +78,6 @@ def _get_menu_options(self) -> list[MenuItem]:
 				mandatory=True,
 				key='disk_config',
 			),
-			MenuItem(
-				text=tr('Disk encryption'),
-				action=self._disk_encryption,
-				preview_action=self._prev_disk_encryption,
-				dependencies=['disk_config'],
-				key='disk_encryption',
-			),
 			MenuItem(
 				text=tr('Swap'),
 				value=True,
@@ -270,19 +262,6 @@ def _update_lang_text(self) -> None:
 			if o.key is not None:
 				self._item_group.find_by_key(o.key).text = o.text
 
-	def _disk_encryption(self, preset: DiskEncryption | None) -> DiskEncryption | None:
-		disk_config: DiskLayoutConfiguration | None = self._item_group.find_by_key('disk_config').value
-
-		if not disk_config:
-			# this should not happen as the encryption menu has the disk_config as dependency
-			raise ValueError('No disk layout specified')
-
-		if not DiskEncryption.validate_enc(disk_config):
-			return None
-
-		disk_encryption = DiskEncryptionMenu(disk_config, preset=preset).run()
-		return disk_encryption
-
 	def _locale_selection(self, preset: LocaleConfiguration) -> LocaleConfiguration:
 		locale_config = LocaleMenu(preset).run()
 		return locale_config
@@ -335,6 +314,9 @@ def _prev_disk_config(self, item: MenuItem) -> str | None:
 			if disk_layout_conf.lvm_config:
 				output += '{}: {}'.format(tr('LVM configuration type'), disk_layout_conf.lvm_config.config_type.display_msg())
 
+			if disk_layout_conf.disk_encryption:
+				output += tr('Disk encryption') + ': ' + EncryptionType.type_to_text(disk_layout_conf.disk_encryption.encryption_type)
+
 			if disk_layout_conf.btrfs_options:
 				btrfs_options = disk_layout_conf.btrfs_options
 				if btrfs_options.snapshot_config:
@@ -391,32 +373,6 @@ def _prev_bootloader(self, item: MenuItem) -> str | None:
 			return f'{tr("Bootloader")}: {item.value.value}'
 		return None
 
-	def _prev_disk_encryption(self, item: MenuItem) -> str | None:
-		disk_config: DiskLayoutConfiguration | None = self._item_group.find_by_key('disk_config').value
-		enc_config: DiskEncryption | None = item.value
-
-		if disk_config and not DiskEncryption.validate_enc(disk_config):
-			return tr('LVM disk encryption with more than 2 partitions is currently not supported')
-
-		if enc_config:
-			enc_type = EncryptionType.type_to_text(enc_config.encryption_type)
-			output = tr('Encryption type') + f': {enc_type}\n'
-
-			if enc_config.encryption_password:
-				output += tr('Password') + f': {enc_config.encryption_password.hidden()}\n'
-
-			if enc_config.partitions:
-				output += f'Partitions: {len(enc_config.partitions)} selected\n'
-			elif enc_config.lvm_volumes:
-				output += f'LVM volumes: {len(enc_config.lvm_volumes)} selected\n'
-
-			if enc_config.hsm_device:
-				output += f'HSM: {enc_config.hsm_device.manufacturer}'
-
-			return output
-
-		return None
-
 	def _validate_bootloader(self) -> str | None:
 		"""
 		Checks the selected bootloader is valid for the selected filesystem
@@ -515,9 +471,6 @@ def _select_disk_config(
 	) -> DiskLayoutConfiguration | None:
 		disk_config = DiskLayoutConfigurationMenu(preset).run()
 
-		if disk_config != preset:
-			self._menu_item_group.find_by_key('disk_encryption').value = None
-
 		return disk_config
 
 	def _select_bootloader(self, preset: Bootloader | None) -> Bootloader | None:
diff --git a/archinstall/lib/installer.py b/archinstall/lib/installer.py
index 41d1768e96..73c5db3007 100644
--- a/archinstall/lib/installer.py
+++ b/archinstall/lib/installer.py
@@ -62,7 +62,6 @@ def __init__(
 		self,
 		target: Path,
 		disk_config: DiskLayoutConfiguration,
-		disk_encryption: DiskEncryption | None = None,
 		base_packages: list[str] = [],
 		kernels: list[str] | None = None,
 	):
@@ -74,7 +73,7 @@ def __init__(
 		self.kernels = kernels or ['linux']
 		self._disk_config = disk_config
 
-		self._disk_encryption = disk_encryption or DiskEncryption(EncryptionType.NoEncryption)
+		self._disk_encryption = disk_config.disk_encryption or DiskEncryption(EncryptionType.NoEncryption)
 		self.target: Path = target
 
 		self.init_time = time.strftime('%Y-%m-%d_%H-%M-%S')
diff --git a/archinstall/lib/models/device_model.py b/archinstall/lib/models/device_model.py
index 6d5ef0ae2e..3714c1e796 100644
--- a/archinstall/lib/models/device_model.py
+++ b/archinstall/lib/models/device_model.py
@@ -41,6 +41,7 @@ class _DiskLayoutConfigurationSerialization(TypedDict):
 	lvm_config: NotRequired[_LvmConfigurationSerialization]
 	mountpoint: NotRequired[str]
 	btrfs_options: NotRequired[_BtrfsOptionsSerialization]
+	disk_encryption: NotRequired[_DiskEncryptionSerialization]
 
 
 @dataclass
@@ -48,6 +49,7 @@ class DiskLayoutConfiguration:
 	config_type: DiskLayoutType
 	device_modifications: list[DeviceModification] = field(default_factory=list)
 	lvm_config: LvmConfiguration | None = None
+	disk_encryption: DiskEncryption | None = None
 	btrfs_options: BtrfsOptions | None = None
 
 	# used for pre-mounted config
@@ -68,13 +70,21 @@ def json(self) -> _DiskLayoutConfigurationSerialization:
 			if self.lvm_config:
 				config['lvm_config'] = self.lvm_config.json()
 
+			if self.disk_encryption:
+				config['disk_encryption'] = self.disk_encryption.json()
+
 			if self.btrfs_options:
 				config['btrfs_options'] = self.btrfs_options.json()
 
 			return config
 
 	@classmethod
-	def parse_arg(cls, disk_config: _DiskLayoutConfigurationSerialization) -> DiskLayoutConfiguration | None:
+	def parse_arg(
+		cls,
+		disk_config: _DiskLayoutConfigurationSerialization,
+		enc_password: Password | None = None,
+		disk_encryption: _DiskEncryptionSerialization | None = None,
+	) -> DiskLayoutConfiguration | None:
 		from archinstall.lib.disk.device_handler import device_handler
 
 		device_modifications: list[DeviceModification] = []
@@ -179,6 +189,9 @@ def parse_arg(cls, disk_config: _DiskLayoutConfigurationSerialization) -> DiskLa
 		if (lvm_arg := disk_config.get('lvm_config', None)) is not None:
 			config.lvm_config = LvmConfiguration.parse_arg(lvm_arg, config)
 
+		if (enc_config := disk_config.get('disk_encryption', None)) is not None:
+			config.disk_encryption = DiskEncryption.parse_arg(config, enc_config, enc_password)
+
 		if config.is_default_btrfs():
 			if (btrfs_arg := disk_config.get('btrfs_options', None)) is not None:
 				config.btrfs_options = BtrfsOptions.parse_arg(btrfs_arg)
diff --git a/archinstall/scripts/guided.py b/archinstall/scripts/guided.py
index f778ed717e..51b1264fed 100644
--- a/archinstall/scripts/guided.py
+++ b/archinstall/scripts/guided.py
@@ -53,14 +53,12 @@ def perform_installation(mountpoint: Path) -> None:
 	disk_config = config.disk_config
 	run_mkinitcpio = not config.uki
 	locale_config = config.locale_config
-	disk_encryption = config.disk_encryption
 	optional_repositories = config.mirror_config.optional_repositories if config.mirror_config else []
 	mountpoint = disk_config.mountpoint if disk_config.mountpoint else mountpoint
 
 	with Installer(
 		mountpoint,
 		disk_config,
-		disk_encryption=disk_encryption,
 		kernels=config.kernels,
 	) as installation:
 		# Mount all the drives to the desired mountpoint
@@ -70,7 +68,7 @@ def perform_installation(mountpoint: Path) -> None:
 		installation.sanity_check()
 
 		if disk_config.config_type != DiskLayoutType.Pre_mount:
-			if disk_encryption and disk_encryption.encryption_type != EncryptionType.NoEncryption:
+			if disk_config.disk_encryption and disk_config.disk_encryption.encryption_type != EncryptionType.NoEncryption:
 				# generate encryption key files for the mounted luks devices
 				installation.generate_key_files()
 
@@ -190,11 +188,7 @@ def guided() -> None:
 				guided()
 
 	if arch_config_handler.config.disk_config:
-		fs_handler = FilesystemHandler(
-			arch_config_handler.config.disk_config,
-			arch_config_handler.config.disk_encryption,
-		)
-
+		fs_handler = FilesystemHandler(arch_config_handler.config.disk_config)
 		fs_handler.perform_filesystem_operations()
 
 	perform_installation(arch_config_handler.args.mountpoint)
diff --git a/archinstall/scripts/minimal.py b/archinstall/scripts/minimal.py
index 90ef541fe5..d3be42f4fa 100644
--- a/archinstall/scripts/minimal.py
+++ b/archinstall/scripts/minimal.py
@@ -4,7 +4,6 @@
 from archinstall.lib.args import arch_config_handler
 from archinstall.lib.configuration import ConfigurationOutput
 from archinstall.lib.disk.disk_menu import DiskLayoutConfigurationMenu
-from archinstall.lib.disk.encryption_menu import DiskEncryptionMenu
 from archinstall.lib.disk.filesystem import FilesystemHandler
 from archinstall.lib.installer import Installer
 from archinstall.lib.models import Bootloader
@@ -23,13 +22,11 @@ def perform_installation(mountpoint: Path) -> None:
 		return
 
 	disk_config = config.disk_config
-	disk_encryption = config.disk_encryption
 	mountpoint = disk_config.mountpoint if disk_config.mountpoint else mountpoint
 
 	with Installer(
 		mountpoint,
 		disk_config,
-		disk_encryption=disk_encryption,
 		kernels=config.kernels,
 	) as installation:
 		# Strap in the base system, add a boot loader and configure
@@ -64,13 +61,7 @@ def perform_installation(mountpoint: Path) -> None:
 def _minimal() -> None:
 	with Tui():
 		disk_config = DiskLayoutConfigurationMenu(disk_layout_config=None).run()
-
-		disk_encryption = None
-		if disk_config:
-			disk_encryption = DiskEncryptionMenu(disk_config).run()
-
 		arch_config_handler.config.disk_config = disk_config
-		arch_config_handler.config.disk_encryption = disk_encryption
 
 	config = ConfigurationOutput(arch_config_handler.config)
 	config.write_debug()
@@ -86,11 +77,7 @@ def _minimal() -> None:
 				_minimal()
 
 	if arch_config_handler.config.disk_config:
-		fs_handler = FilesystemHandler(
-			arch_config_handler.config.disk_config,
-			arch_config_handler.config.disk_encryption,
-		)
-
+		fs_handler = FilesystemHandler(arch_config_handler.config.disk_config)
 		fs_handler.perform_filesystem_operations()
 
 	perform_installation(arch_config_handler.args.mountpoint)
diff --git a/archinstall/scripts/only_hd.py b/archinstall/scripts/only_hd.py
index c3977497d3..48205e264c 100644
--- a/archinstall/scripts/only_hd.py
+++ b/archinstall/scripts/only_hd.py
@@ -17,7 +17,6 @@ def ask_user_questions() -> None:
 
 		global_menu.set_enabled('archinstall_language', True)
 		global_menu.set_enabled('disk_config', True)
-		global_menu.set_enabled('disk_encryption', True)
 		global_menu.set_enabled('swap', True)
 		global_menu.set_enabled('__config__', True)
 
@@ -37,13 +36,11 @@ def perform_installation(mountpoint: Path) -> None:
 		return
 
 	disk_config = config.disk_config
-	disk_encryption = config.disk_encryption
 	mountpoint = disk_config.mountpoint if disk_config.mountpoint else mountpoint
 
 	with Installer(
 		mountpoint,
 		disk_config,
-		disk_encryption=disk_encryption,
 		kernels=config.kernels,
 	) as installation:
 		# Mount all the drives to the desired mountpoint
@@ -78,11 +75,7 @@ def _only_hd() -> None:
 				_only_hd()
 
 	if arch_config_handler.config.disk_config:
-		fs_handler = FilesystemHandler(
-			arch_config_handler.config.disk_config,
-			arch_config_handler.config.disk_encryption,
-		)
-
+		fs_handler = FilesystemHandler(arch_config_handler.config.disk_config)
 		fs_handler.perform_filesystem_operations()
 
 	perform_installation(arch_config_handler.args.mountpoint)
diff --git a/examples/full_automated_installation.py b/examples/full_automated_installation.py
index 181d20c8d4..d172978388 100644
--- a/examples/full_automated_installation.py
+++ b/examples/full_automated_installation.py
@@ -87,8 +87,10 @@
 	hsm_device=None,
 )
 
+disk_config.disk_encryption = disk_encryption
+
 # initiate file handler with the disk config and the optional disk encryption config
-fs_handler = FilesystemHandler(disk_config, disk_encryption)
+fs_handler = FilesystemHandler(disk_config)
 
 # perform all file operations
 # WARNING: this will potentially format the filesystem and delete all data
@@ -99,7 +101,6 @@
 with Installer(
 	mountpoint,
 	disk_config,
-	disk_encryption=disk_encryption,
 	kernels=['linux'],
 ) as installation:
 	installation.mount_ordered_layout()
diff --git a/tests/test_args.py b/tests/test_args.py
index e6308925e9..772e4d00c6 100644
--- a/tests/test_args.py
+++ b/tests/test_args.py
@@ -211,7 +211,6 @@ def test_config_file_parsing(
 				groups=['wheel'],
 			),
 		],
-		disk_encryption=None,
 		services=['service_1', 'service_2'],
 		root_enc_password=Password(enc_password='password_hash'),
 		custom_commands=["echo 'Hello, World!'"],