A method and apparatus for removing duplicated data in a file system utilizing the concept of storage tiers. A synthetic namespace is created via file virtualization, and is comprised of one or more file systems. Deduplication is applied at the namespace level and on all of the file systems comprising the synthetic namespace. All files in a file system in a higher storage tier whose contents are identical to at least one other file in the synthetic namespace are moved to a destination file system in a lower storage tier. For each set of duplicated files that are moved from the original servers, a single instance copy of the file is left behind as a mirror copy. Read access to a duplicated file is redirected to its mirror copy. When the first write to a duplicated file is received, the association from the duplicated file stored in the destination server to its mirror copy that is stored in the origin server is discarded. Access to the “modified” duplicated file will then resume normally from the destination server.