A method of forming a semiconductor device is provided that includes forming an oxide containing isolation region in a semiconductor substrate to define an active semiconductor region. A blanket gate stack including a high-k gate dielectric layer may then be formed on the active semiconductor region. At least a portion of the blanket gate stack extends from the active semiconductor device region to the isolation region. The blanket gate stack may then be etched to provide an opening over the isolation region. The surface of the isolation region that is exposed by the opening may then be isotropically etched to form an undercut region in the isolation region that extend under the high-k gate dielectric layer. An encapsulating dielectric material may then be formed in the opening filling the undercut region. The blanket gate stack may then be patterned to form a gate structure.