diff --git a/ads/aqua/common/utils.py b/ads/aqua/common/utils.py
index 6e1e09aca..001b22e8c 100644
--- a/ads/aqua/common/utils.py
+++ b/ads/aqua/common/utils.py
@@ -1,5 +1,5 @@
 #!/usr/bin/env python
-# Copyright (c) 2024 Oracle and/or its affiliates.
+# Copyright (c) 2024, 2025 Oracle and/or its affiliates.
 # Licensed under the Universal Permissive License v 1.0 as shown at https://oss.oracle.com/licenses/upl/
 """AQUA utils and constants."""
 
@@ -11,6 +11,7 @@
 import random
 import re
 import shlex
+import shutil
 import subprocess
 from datetime import datetime, timedelta
 from functools import wraps
@@ -21,6 +22,8 @@
 import fsspec
 import oci
 from cachetools import TTLCache, cached
+from huggingface_hub.constants import HF_HUB_CACHE
+from huggingface_hub.file_download import repo_folder_name
 from huggingface_hub.hf_api import HfApi, ModelInfo
 from huggingface_hub.utils import (
     GatedRepoError,
@@ -788,7 +791,9 @@ def get_ocid_substring(ocid: str, key_len: int) -> str:
     return ocid[-key_len:] if ocid and len(ocid) > key_len else ""
 
 
-def upload_folder(os_path: str, local_dir: str, model_name: str, exclude_pattern: str = None) -> str:
+def upload_folder(
+    os_path: str, local_dir: str, model_name: str, exclude_pattern: str = None
+) -> str:
     """Upload the local folder to the object storage
 
     Args:
@@ -818,6 +823,48 @@ def upload_folder(os_path: str, local_dir: str, model_name: str, exclude_pattern
     return f"oci://{os_details.bucket}@{os_details.namespace}" + "/" + object_path
 
 
+def cleanup_local_hf_model_artifact(
+    model_name: str,
+    local_dir: str = None,
+):
+    """
+    Helper function that deletes local artifacts downloaded from Hugging Face to free up disk space.
+    Parameters
+    ----------
+    model_name (str): Name of the huggingface model
+    local_dir (str): Local directory where the object is downloaded
+
+    """
+    if local_dir and os.path.exists(local_dir):
+        model_dir = os.path.join(local_dir, model_name)
+        model_dir = (
+            os.path.dirname(model_dir)
+            if "/" in model_name or os.sep in model_name
+            else model_dir
+        )
+        shutil.rmtree(model_dir, ignore_errors=True)
+        if os.path.exists(model_dir):
+            logger.debug(
+                f"Could not delete local model artifact directory: {model_dir}"
+            )
+        else:
+            logger.debug(f"Deleted local model artifact directory: {model_dir}.")
+
+    hf_local_path = os.path.join(
+        HF_HUB_CACHE, repo_folder_name(repo_id=model_name, repo_type="model")
+    )
+    shutil.rmtree(hf_local_path, ignore_errors=True)
+
+    if os.path.exists(hf_local_path):
+        logger.debug(
+            f"Could not clear the local Hugging Face cache directory {hf_local_path} for the model {model_name}."
+        )
+    else:
+        logger.debug(
+            f"Cleared contents of local Hugging Face cache directory {hf_local_path} for the model {model_name}."
+        )
+
+
 def is_service_managed_container(container):
     return container and container.startswith(SERVICE_MANAGED_CONTAINER_URI_SCHEME)
 
diff --git a/ads/aqua/extension/model_handler.py b/ads/aqua/extension/model_handler.py
index 42f90ffef..3024dc392 100644
--- a/ads/aqua/extension/model_handler.py
+++ b/ads/aqua/extension/model_handler.py
@@ -1,5 +1,5 @@
 #!/usr/bin/env python
-# Copyright (c) 2024 Oracle and/or its affiliates.
+# Copyright (c) 2024, 2025 Oracle and/or its affiliates.
 # Licensed under the Universal Permissive License v 1.0 as shown at https://oss.oracle.com/licenses/upl/
 
 from typing import Optional
@@ -128,6 +128,10 @@ def post(self, *args, **kwargs):  # noqa: ARG002
         download_from_hf = (
             str(input_data.get("download_from_hf", "false")).lower() == "true"
         )
+        local_dir = input_data.get("local_dir")
+        cleanup_model_cache = (
+            str(input_data.get("cleanup_model_cache", "true")).lower() == "true"
+        )
         inference_container_uri = input_data.get("inference_container_uri")
         allow_patterns = input_data.get("allow_patterns")
         ignore_patterns = input_data.get("ignore_patterns")
@@ -139,6 +143,8 @@ def post(self, *args, **kwargs):  # noqa: ARG002
                 model=model,
                 os_path=os_path,
                 download_from_hf=download_from_hf,
+                local_dir=local_dir,
+                cleanup_model_cache=cleanup_model_cache,
                 inference_container=inference_container,
                 finetuning_container=finetuning_container,
                 compartment_id=compartment_id,
diff --git a/ads/aqua/model/entities.py b/ads/aqua/model/entities.py
index ecdb8b8e7..6dd5eba21 100644
--- a/ads/aqua/model/entities.py
+++ b/ads/aqua/model/entities.py
@@ -1,5 +1,5 @@
 #!/usr/bin/env python
-# Copyright (c) 2024 Oracle and/or its affiliates.
+# Copyright (c) 2024, 2025 Oracle and/or its affiliates.
 # Licensed under the Universal Permissive License v 1.0 as shown at https://oss.oracle.com/licenses/upl/
 
 """
@@ -283,6 +283,7 @@ class ImportModelDetails(CLIBuilderMixin):
     os_path: str
     download_from_hf: Optional[bool] = True
     local_dir: Optional[str] = None
+    cleanup_model_cache: Optional[bool] = True
     inference_container: Optional[str] = None
     finetuning_container: Optional[str] = None
     compartment_id: Optional[str] = None
diff --git a/ads/aqua/model/model.py b/ads/aqua/model/model.py
index 02e0df00f..16e1865a4 100644
--- a/ads/aqua/model/model.py
+++ b/ads/aqua/model/model.py
@@ -1,5 +1,5 @@
 #!/usr/bin/env python
-# Copyright (c) 2024 Oracle and/or its affiliates.
+# Copyright (c) 2024, 2025 Oracle and/or its affiliates.
 # Licensed under the Universal Permissive License v 1.0 as shown at https://oss.oracle.com/licenses/upl/
 import os
 import pathlib
@@ -23,6 +23,7 @@
 from ads.aqua.common.utils import (
     LifecycleStatus,
     _build_resource_identifier,
+    cleanup_local_hf_model_artifact,
     copy_model_config,
     create_word_icon,
     generate_tei_cmd_var,
@@ -1322,20 +1323,18 @@ def _download_model_from_hf(
         Returns
         -------
         model_artifact_path (str): Location where the model artifacts are downloaded.
-
         """
         # Download the model from hub
-        if not local_dir:
-            local_dir = os.path.join(os.path.expanduser("~"), "cached-model")
-        local_dir = os.path.join(local_dir, model_name)
-        os.makedirs(local_dir, exist_ok=True)
+        if local_dir:
+            local_dir = os.path.join(local_dir, model_name)
+            os.makedirs(local_dir, exist_ok=True)
         snapshot_download(
             repo_id=model_name,
             local_dir=local_dir,
             allow_patterns=allow_patterns,
             ignore_patterns=ignore_patterns,
         )
-        # Upload to object storage and skip .cache/huggingface/ folder
+        # Upload to object storage
         model_artifact_path = upload_folder(
             os_path=os_path,
             local_dir=local_dir,
@@ -1365,6 +1364,8 @@ def register(
                 ignore_patterns (list): Model files matching any of the patterns are not downloaded.
                     Example: ["*.json"] will ignore all .json files. ["folder/*"] will ignore all files under `folder`.
                     Patterns are Standard Wildcards (globbing patterns) and rules can be found here: https://docs.python.org/3/library/fnmatch.html
+                cleanup_model_cache (bool): Deletes downloaded files from local machine after model is successfully
+                registered. Set to True by default.
 
         Returns:
             AquaModel:
@@ -1474,6 +1475,14 @@ def register(
             detail=validation_result.telemetry_model_name,
         )
 
+        if (
+            import_model_details.download_from_hf
+            and import_model_details.cleanup_model_cache
+        ):
+            cleanup_local_hf_model_artifact(
+                model_name=model_name, local_dir=import_model_details.local_dir
+            )
+
         return AquaModel(**aqua_model_attributes)
 
     def _if_show(self, model: DataScienceModel) -> bool:
diff --git a/tests/unitary/with_extras/aqua/test_model.py b/tests/unitary/with_extras/aqua/test_model.py
index cabb8c523..158646bdb 100644
--- a/tests/unitary/with_extras/aqua/test_model.py
+++ b/tests/unitary/with_extras/aqua/test_model.py
@@ -1,6 +1,6 @@
 #!/usr/bin/env python
 # -*- coding: utf-8 -*--
-# Copyright (c) 2024 Oracle and/or its affiliates.
+# Copyright (c) 2024, 2025 Oracle and/or its affiliates.
 # Licensed under the Universal Permissive License v 1.0 as shown at https://oss.oracle.com/licenses/upl/
 
 import os
@@ -653,12 +653,12 @@ def test_get_model_fine_tuned(
         }
 
     @pytest.mark.parametrize(
-        ("artifact_location_set", "download_from_hf"),
+        ("artifact_location_set", "download_from_hf", "cleanup_model_cache"),
         [
-            (True, True),
-            (True, False),
-            (False, True),
-            (False, False),
+            (True, True, True),
+            (True, False, True),
+            (False, True, False),
+            (False, False, True),
         ],
     )
     @patch("ads.model.service.oci_datascience_model.OCIDataScienceModel.create")
@@ -683,6 +683,7 @@ def test_import_verified_model(
         mock_ocidsc_create,
         artifact_location_set,
         download_from_hf,
+        cleanup_model_cache,
         mock_get_hf_model_info,
         mock_init_client,
     ):
@@ -747,6 +748,7 @@ def test_import_verified_model(
                     os_path=os_path,
                     local_dir=str(tmpdir),
                     download_from_hf=True,
+                    cleanup_model_cache=cleanup_model_cache,
                     allow_patterns=["*.json"],
                     ignore_patterns=["test.json"],
                 )
@@ -761,6 +763,20 @@ def test_import_verified_model(
                         f"oci os object bulk-upload --src-dir {str(tmpdir)}/{model_name} --prefix prefix/path/{model_name}/ -bn aqua-bkt -ns aqua-ns --auth api_key --profile DEFAULT --no-overwrite --exclude {HF_METADATA_FOLDER}*"
                     )
                 )
+                if cleanup_model_cache:
+                    cache_dir = os.path.join(
+                        os.path.expanduser("~"),
+                        ".cache",
+                        "huggingface",
+                        "hub",
+                        "models--oracle--aqua-1t-mega-model",
+                    )
+                    assert (
+                        os.path.exists(f"{str(tmpdir)}/{os.path.dirname(model_name)}")
+                        is False
+                    )
+                    assert os.path.exists(cache_dir) is False
+
         else:
             model: AquaModel = app.register(
                 model="ocid1.datasciencemodel.xxx.xxxx.",
@@ -1183,14 +1199,14 @@ def test_import_model_with_input_tags(
                     "model": "oracle/oracle-1it",
                     "inference_container": "odsc-vllm-serving",
                 },
-                "ads aqua model register --model oracle/oracle-1it --os_path oci://aqua-bkt@aqua-ns/path --download_from_hf True --inference_container odsc-vllm-serving",
+                "ads aqua model register --model oracle/oracle-1it --os_path oci://aqua-bkt@aqua-ns/path --download_from_hf True --cleanup_model_cache True --inference_container odsc-vllm-serving",
             ),
             (
                 {
                     "os_path": "oci://aqua-bkt@aqua-ns/path",
                     "model": "ocid1.datasciencemodel.oc1.iad.<OCID>",
                 },
-                "ads aqua model register --model ocid1.datasciencemodel.oc1.iad.<OCID> --os_path oci://aqua-bkt@aqua-ns/path --download_from_hf True",
+                "ads aqua model register --model ocid1.datasciencemodel.oc1.iad.<OCID> --os_path oci://aqua-bkt@aqua-ns/path --download_from_hf True --cleanup_model_cache True",
             ),
             (
                 {
@@ -1198,7 +1214,7 @@ def test_import_model_with_input_tags(
                     "model": "oracle/oracle-1it",
                     "download_from_hf": False,
                 },
-                "ads aqua model register --model oracle/oracle-1it --os_path oci://aqua-bkt@aqua-ns/path --download_from_hf False",
+                "ads aqua model register --model oracle/oracle-1it --os_path oci://aqua-bkt@aqua-ns/path --download_from_hf False --cleanup_model_cache True",
             ),
             (
                 {
@@ -1207,7 +1223,7 @@ def test_import_model_with_input_tags(
                     "download_from_hf": True,
                     "model_file": "test_model_file",
                 },
-                "ads aqua model register --model oracle/oracle-1it --os_path oci://aqua-bkt@aqua-ns/path --download_from_hf True --model_file test_model_file",
+                "ads aqua model register --model oracle/oracle-1it --os_path oci://aqua-bkt@aqua-ns/path --download_from_hf True --cleanup_model_cache True --model_file test_model_file",
             ),
             (
                 {
@@ -1216,7 +1232,7 @@ def test_import_model_with_input_tags(
                     "inference_container": "odsc-tei-serving",
                     "inference_container_uri": "<region>.ocir.io/<your_tenancy>/<your_image>",
                 },
-                "ads aqua model register --model oracle/oracle-1it --os_path oci://aqua-bkt@aqua-ns/path --download_from_hf True --inference_container odsc-tei-serving --inference_container_uri <region>.ocir.io/<your_tenancy>/<your_image>",
+                "ads aqua model register --model oracle/oracle-1it --os_path oci://aqua-bkt@aqua-ns/path --download_from_hf True --cleanup_model_cache True --inference_container odsc-tei-serving --inference_container_uri <region>.ocir.io/<your_tenancy>/<your_image>",
             ),
             (
                 {
@@ -1227,7 +1243,7 @@ def test_import_model_with_input_tags(
                     "defined_tags": {"dtag1": "dvalue1", "dtag2": "dvalue2"},
                 },
                 "ads aqua model register --model oracle/oracle-1it --os_path oci://aqua-bkt@aqua-ns/path "
-                "--download_from_hf True --inference_container odsc-vllm-serving --freeform_tags "
+                "--download_from_hf True --cleanup_model_cache True --inference_container odsc-vllm-serving --freeform_tags "
                 '{"ftag1": "fvalue1", "ftag2": "fvalue2"} --defined_tags {"dtag1": "dvalue1", "dtag2": "dvalue2"}',
             ),
         ],
diff --git a/tests/unitary/with_extras/aqua/test_model_handler.py b/tests/unitary/with_extras/aqua/test_model_handler.py
index bf02174b9..391f6a19d 100644
--- a/tests/unitary/with_extras/aqua/test_model_handler.py
+++ b/tests/unitary/with_extras/aqua/test_model_handler.py
@@ -1,6 +1,6 @@
 #!/usr/bin/env python
 # -*- coding: utf-8 -*--
-# Copyright (c) 2024 Oracle and/or its affiliates.
+# Copyright (c) 2024, 2025 Oracle and/or its affiliates.
 # Licensed under the Universal Permissive License v 1.0 as shown at https://oss.oracle.com/licenses/upl/
 
 from unittest import TestCase
@@ -213,6 +213,8 @@ def test_register(
             project_id=None,
             model_file=model_file,
             download_from_hf=download_from_hf,
+            local_dir=None,
+            cleanup_model_cache=True,
             inference_container_uri=inference_container_uri,
             allow_patterns=allow_patterns,
             ignore_patterns=ignore_patterns,