In one embodiment, a system includes a server having a hypervisor layer that includes an overlay-configured virtual switch and a Fiber Channel (FC) virtual switch. The system also includes at least one processor configured to execute logic and a converge network adapter (CNA) coupled to the hypervisor layer. The CNA is configured to communicate with the overlay-configured virtual switch and the FC virtual switch, and with a FC forwarder (FCF). Moreover, the overlay-configured virtual switch includes logic configured to communicate with a central controller. In another embodiment, a method includes receiving a block of media access control (MAC) addresses for use in local fabric initialization protocol (FIP) operations and advertising to all local Fiber Channel over Ethernet (FCoE) initiators to route FCoE traffic to a FC virtual switch by asserting an overlay-configured virtual switch as a FCF for any requesting FCoE initiators.