Systems and methods are provided to detect when a virtual machine moves across a switch device boundary, keep existing application sessions alive, and provide optimal forwarding for new application sessions with graceful address migration. Virtual machine movement can be detected on the new switching device by comparing the Device ID in the Source Address of the ND-NA with the Device ID of the new switching device. A temporary hardware forwarding sub-optimal path is maintained for existing application sessions. A new IP address is assigned to the moved virtual machine and an optimal forwarding path is programmed in hardware for new application sessions. The temporary sub-optimal hardware forwarding path is removed after all old application are terminated.