diff --git a/cli/src/stake.rs b/cli/src/stake.rs
index bced64474..9b40e6491 100644
--- a/cli/src/stake.rs
+++ b/cli/src/stake.rs
@@ -672,16 +672,6 @@ pub fn process_create_stake_account(
     fee_payer: Option<&dyn Signer>,
     from: Option<&dyn Signer>,
 ) -> ProcessResult {
-    // Offline derived address creation currently is not possible
-    // https://github.com/solana-labs/solana/pull/8252
-    if seed.is_some() && sign_only {
-        return Err(CliError::BadParameter(
-            "Offline stake account creation with derived addresses are not yet supported"
-                .to_string(),
-        )
-        .into());
-    }
-
     let stake_account_address = if let Some(seed) = seed {
         create_address_with_seed(&stake_account.pubkey(), &seed, &solana_stake_program::id())?
     } else {
diff --git a/cli/tests/stake.rs b/cli/tests/stake.rs
index 5c2188270..526cb4b0e 100644
--- a/cli/tests/stake.rs
+++ b/cli/tests/stake.rs
@@ -1380,10 +1380,19 @@ fn test_offline_nonced_create_stake_account_and_withdraw() {
     process_command(&config).unwrap();
     check_balance(42, &rpc_client, &recipient_pubkey);
 
-    // Test that offline derived addresses fail
+    // Fetch nonce hash
+    let account = rpc_client.get_account(&nonce_account.pubkey()).unwrap();
+    let nonce_state: NonceState = account.state().unwrap();
+    let nonce_hash = match nonce_state {
+        NonceState::Initialized(_meta, hash) => hash,
+        _ => panic!("Nonce is not initialized"),
+    };
+
+    // Create another stake account. This time with seed
+    let seed = "seedy";
     config_offline.command = CliCommand::CreateStakeAccount {
         stake_account: Rc::new(Box::new(read_keypair_file(&stake_keypair_file).unwrap())),
-        seed: Some("fail".to_string()),
+        seed: Some(seed.to_string()),
         staker: None,
         withdrawer: None,
         lockup: Lockup::default(),
@@ -1395,7 +1404,28 @@ fn test_offline_nonced_create_stake_account_and_withdraw() {
         fee_payer: None,
         from: None,
     };
-    process_command(&config_offline).unwrap_err();
+    let sig_response = process_command(&config_offline).unwrap();
+    let (blockhash, signers) = parse_sign_only_reply_string(&sig_response);
+    let offline_presigner = presigner_from_pubkey_sigs(&offline_pubkey, &signers).unwrap();
+    let stake_presigner = presigner_from_pubkey_sigs(&stake_pubkey, &signers).unwrap();
+    config.command = CliCommand::CreateStakeAccount {
+        stake_account: Rc::new(stake_presigner.into()),
+        seed: Some(seed.to_string()),
+        staker: Some(offline_pubkey.into()),
+        withdrawer: Some(offline_pubkey.into()),
+        lockup: Lockup::default(),
+        lamports: 50_000,
+        sign_only: false,
+        blockhash_query: BlockhashQuery::FeeCalculator(blockhash),
+        nonce_account: Some(nonce_pubkey),
+        nonce_authority: Some(offline_presigner.clone().into()),
+        fee_payer: Some(offline_presigner.clone().into()),
+        from: Some(offline_presigner.clone().into()),
+    };
+    process_command(&config).unwrap();
+    let seed_address =
+        create_address_with_seed(&stake_pubkey, seed, &solana_stake_program::id()).unwrap();
+    check_balance(50_000, &rpc_client, &seed_address);
 
     server.close().unwrap();
     remove_dir_all(ledger_path).unwrap();