diff --git a/ansible/group_vars/all.yml b/ansible/group_vars/all.yml
index e8a84fa9ba..7209ba2df7 100644
--- a/ansible/group_vars/all.yml
+++ b/ansible/group_vars/all.yml
@@ -631,7 +631,9 @@ neutron_type_drivers: "flat,vlan,vxlan"
 # NOTE: for ironic this list should also contain 'flat'
 neutron_tenant_network_types: "vxlan"
 
-computes_need_external_bridge: "{{ enable_neutron_dvr | bool or enable_neutron_provider_networks | bool or enable_opendaylight | bool and neutron_plugin_agent != 'vmware_dvs' }}"
+# valid values: ["dvr", "dvr_no_external"]
+neutron_compute_dvr_mode: "dvr"
+computes_need_external_bridge: "{{ enable_neutron_dvr | bool and (neutron_compute_dvr_mode == 'dvr' or inventory_hostname in groups['external-compute']) or enable_neutron_provider_networks | bool or enable_opendaylight | bool and neutron_plugin_agent != 'vmware_dvs' }}"
 
 #######################
 # Nova options
diff --git a/ansible/inventory/all-in-one b/ansible/inventory/all-in-one
index fd50b41025..2cfb598a81 100644
--- a/ansible/inventory/all-in-one
+++ b/ansible/inventory/all-in-one
@@ -7,11 +7,15 @@ localhost       ansible_connection=local
 localhost       ansible_connection=local
 
 # inner-compute is the groups of compute nodes which do not have
-# external reachability
+# external reachability.
+# DEPRECATED, the group will be removed in S release of OpenStack,
+# use variable neutron_compute_dvr_mode instead.
 [inner-compute]
 
 # external-compute is the groups of compute nodes which can reach
-# outside
+# outside.
+# DEPRECATED, the group will be removed in S release of OpenStack,
+# use variable neutron_compute_dvr_mode instead.
 [external-compute]
 localhost       ansible_connection=local
 
diff --git a/ansible/inventory/multinode b/ansible/inventory/multinode
index d2ba5b8b4c..71c7760374 100644
--- a/ansible/inventory/multinode
+++ b/ansible/inventory/multinode
@@ -16,11 +16,15 @@ network01
 network02
 
 # inner-compute is the groups of compute nodes which do not have
-# external reachability
+# external reachability.
+# DEPRECATED, the group will be removed in S release of OpenStack,
+# use variable neutron_compute_dvr_mode instead.
 [inner-compute]
 
 # external-compute is the groups of compute nodes which can reach
-# outside
+# outside.
+# DEPRECATED, the group will be removed in S release of OpenStack,
+# use variable neutron_compute_dvr_mode instead.
 [external-compute]
 compute01
 
diff --git a/ansible/roles/neutron/tasks/precheck.yml b/ansible/roles/neutron/tasks/precheck.yml
index e357ab4383..b234949476 100644
--- a/ansible/roles/neutron/tasks/precheck.yml
+++ b/ansible/roles/neutron/tasks/precheck.yml
@@ -47,3 +47,13 @@
   when: item not in type_drivers
   run_once: true
   with_items: "{{ tenant_network_types }}"
+
+- name: Checking for deprecated inner- and external-compute groups
+  local_action:
+    module: debug
+    msg: "WARNING: inner- and external-compute groups are DEPRECATED"
+  changed_when: false
+  run_once: True
+  when:
+    - (groups['inner-compute'] | default([]) | length > 0
+       or groups['external-compute'] | default([]) | length > 0)
diff --git a/ansible/roles/neutron/templates/l3_agent.ini.j2 b/ansible/roles/neutron/templates/l3_agent.ini.j2
index b271fda358..968a2a729a 100644
--- a/ansible/roles/neutron/templates/l3_agent.ini.j2
+++ b/ansible/roles/neutron/templates/l3_agent.ini.j2
@@ -7,6 +7,8 @@ agent_mode = dvr_snat
 agent_mode = dvr
 {% elif inventory_hostname in groups['inner-compute'] %}
 agent_mode = dvr_no_external
+{% elif inventory_hostname in groups['compute'] %}
+agent_mode = {{ neutron_compute_dvr_mode }}
 {% endif %}
 {% else %}
 agent_mode = legacy
diff --git a/releasenotes/notes/dvr-mode-property-13b3699f9a9c4359.yaml b/releasenotes/notes/dvr-mode-property-13b3699f9a9c4359.yaml
new file mode 100644
index 0000000000..415d0270d1
--- /dev/null
+++ b/releasenotes/notes/dvr-mode-property-13b3699f9a9c4359.yaml
@@ -0,0 +1,23 @@
+---
+features:
+  - |
+    [`blueprint Replace inner-/external computes with a dvr mode variable <https://blueprints.launchpad.net/kolla-ansible/+spec/dvr_mode_property>`_]
+    A new variable "neutron_compute_dvr_mode" is introduced. This variable
+    controls whether a compute host has external connection and is
+    allowed to do full-blown DVR or distributed routing is only used for
+    tenant networking. Corresponding values are "dvr" and "dvr_no_external"
+    The variable has to be set either globally or per group (per host)
+    to get desired behavior.
+upgrade:
+  - |
+    All hosts from "[inner-compute]" and "[external-compute]" can be moved to
+    "[compute]" to avoid problems in OpenStack S release, though the groups
+    still will function well in this release.
+deprecations:
+  - |
+    Splitting of compute group into inner and external compute hosts is
+    deprecated and will be removed in OpenStack S release.
+fixes:
+  - |
+    External bridge setup on compute hosts that depends on whether DVR mode
+    is enabled is also accompanied by a check for the new variable.
diff --git a/tests/templates/inventory.j2 b/tests/templates/inventory.j2
index 2a3efbaad8..ea9150a203 100644
--- a/tests/templates/inventory.j2
+++ b/tests/templates/inventory.j2
@@ -10,21 +10,11 @@
 {{ host }} ansible_host={{ hostvars[host]['ansible_host'] }} ansible_become=true ansible_user={{ hostvars[host]['ansible_user'] }}
 {% endfor %}
 
-# inner-compute is the groups of compute nodes which do not have
-# external reachability
-[inner-compute]
-
-# external-compute is the groups of compute nodes which can reach
-# outside
-[external-compute]
+[compute]
 {% for host in hostvars %}
 {{ host }} ansible_host={{ hostvars[host]['ansible_host'] }} ansible_become=true ansible_user={{ hostvars[host]['ansible_user'] }}
 {% endfor %}
 
-[compute:children]
-inner-compute
-external-compute
-
 [storage]
 {% for host in hostvars %}
 {{ host }} ansible_host={{ hostvars[host]['ansible_host'] }} ansible_become=true ansible_user={{ hostvars[host]['ansible_user'] }}