The present disclosure provides methods and systems for automatic carving of Optical channel Data Unit k (ODUk) levels on connection creation as well as the enforcement of an OTN hierarchy policy. In an exemplary embodiment, the present invention provides several methods of automatically carving Optical channel Data Tributary Unit Group (ODTUG) structures down to a desired ODUk layer during end-to-end circuit setup. These methods may include a recursively descending algorithm, an iterative array algorithm, and an ordered linked list algorithm. Additionally, to interoperate with network elements which may have a fixed ODTUG structure within an Optical channel Transport Unit (OTU), a method of policy enforcement describing each ODUk layer mapped into ODTUG structures is used to select a best match of the currently provisioned ODUk layers.