One embodiment provides a method to interconnect virtual network segments (VNETs) defined for a local-area network (LAN) infrastructure separated by a wide-area network infrastructure. The technique involves the routing device at the LAN-WAN interconnection points to impose or dispose the VNET-shim, which encodes the VNET-id information in a Layer 4 portion of the packet. In a data plane, a new IP protocol value may be used to signify the presence of the VNET-shim followed by cryptography specific information in an IP packet. In a control plane, the routing protocol is expanded to exchange the routing information along with the VNET information.