diff --git a/.gitignore b/.gitignore
index 09001e4..9fe7a7d 100644
--- a/.gitignore
+++ b/.gitignore
@@ -1,4 +1,5 @@
 l2-setup/out
+l2-setup/hosts.ini
 nitro-bridge-setup/out
 nitro-bridge-setup/bridge-vars.yml
 nitro-nodes-setup/nitro-vars.yml
diff --git a/example-hosts.ini b/example-hosts.ini
new file mode 100644
index 0000000..66eacd8
--- /dev/null
+++ b/example-hosts.ini
@@ -0,0 +1,2 @@
+[nitro_host]
+host_name ansible_host=<TARGET_IP> ansible_user=<SSH_USER> ansible_ssh_common_args='-o ForwardAgent=yes'
\ No newline at end of file
diff --git a/l2-setup/README.md b/l2-setup/README.md
index ae31893..1acbf3e 100644
--- a/l2-setup/README.md
+++ b/l2-setup/README.md
@@ -4,6 +4,33 @@
 
 To get started, follow the [installation](../README.md#installation) guide to setup ansible on your machine
 
+## Setup Remote Hosts
+
+To run the playbooks on a remote machine, follow these steps:
+
+- In the [`l2-setup`](./) directory, create a new file named hosts.ini:
+
+   ```bash
+   cp ../example-hosts.ini hosts.ini
+   ```
+
+- Edit the [`hosts.ini`](./hosts.ini) file to run the playbook on a remote machine
+
+   ```bash
+  [nitro_host]
+  hostname ansible_host= ansible_user= ansible_ssh_common_args='-o ForwardAgent=yes'
+   ```
+
+  - Replace `host_name` with the alias of your choice.
+  - Replace `<TARGET_IP>` with the IP address or hostname of the target machine.
+  - Replace `<SSH_USER>` with the SSH username (e.g., dev, ubuntu).
+
+- Verify that you are able to connect to the host using the following command
+
+  ```bash
+  ansible all -m ping -i hosts.ini
+  ```
+
 ## Setup and Run Optimism
 
 The following commands have to be executed in [`l2-setup`](./) directory
@@ -34,18 +61,26 @@ The following commands have to be executed in [`l2-setup`](./) directory
   l1_priv_key: ""
   ```
 
-- To setup and run L2, execute the `run-optimism.yml` Ansible playbook by running the following command.
+- To setup and run L2, execute the `run-optimism.yml` Ansible playbook by running one of the following commands:
 
-  NOTE: By default, deployments are created in the `l2-setup/out` directory. To change this location, update the `l2_directory` variable in the [setup-vars.yml](./setup-vars.yml) file.
+  For local deployment:
 
   ```bash
-  LANG=en_US.utf8 ansible-playbook -i localhost, --connection=local run-optimism.yml --extra-vars='{ "target_host": "localhost"}' -kK --user $USER
+  LANG=en_US.utf8 ansible-playbook run-optimism.yml --extra-vars='{ "target_host": "localhost"}' -kK --user $USER
   ```
 
+  For remote deployment:
+
+  ```bash
+  LANG=en_US.utf8 ansible-playbook -i ./hosts.ini run-optimism.yml --extra-vars='{ "target_host": "nitro_host"}' -kK
+  ```
+
+  NOTE: By default, deployments are created in a `out` directory. To change this location, update the `l2_directory` variable in the [setup-vars.yml](./setup-vars.yml) file.
+
   - For skipping container build, set `"skip_container_build" : true` in the `--extra-vars` parameter:
 
     ```bash
-    LANG=en_US.utf8 ansible-playbook -i localhost, --connection=local run-optimism.yml --extra-vars='{"target_host" : "localhost", "skip_container_build": true}' -kK --user $USER
+    LANG=en_US.utf8 ansible-playbook -i ./hosts.ini run-optimism.yml --extra-vars='{"target_host" : "nitro_host", "skip_container_build": true}' -kK
     ```
 
 - To run using existing contracts deployment
@@ -55,7 +90,7 @@ The following commands have to be executed in [`l2-setup`](./) directory
   - Run the ansible playbook with `"existing_contracts_deployment": true` in the `--extra-vars` parameter:
 
     ```bash
-    LANG=en_US.utf8 ansible-playbook -i localhost, --connection=local run-optimism.yml --extra-vars='{"target_host" : "localhost", "existing_contracts_deployment":  true}' -kK --user $USER
+    LANG=en_US.utf8 ansible-playbook -i ./hosts.ini run-optimism.yml --extra-vars='{"target_host" : "nitro_host", "existing_contracts_deployment":  true}' -kK
     ```
 
 ## Check Deployment Status
diff --git a/l2-setup/setup-vars.yml b/l2-setup/setup-vars.yml
index ea03344..3615a0c 100644
--- a/l2-setup/setup-vars.yml
+++ b/l2-setup/setup-vars.yml
@@ -1,4 +1,4 @@
 skip_container_build: false
-l2_directory: "./out"
+l2_directory: "out"
 existing_contracts_deployment: false
 artifact_path: ""