diff --git a/pkg/ctrl/connection/connection_ctrl.go b/pkg/ctrl/connection/connection_ctrl.go
new file mode 100644
index 00000000..cc9b5298
--- /dev/null
+++ b/pkg/ctrl/connection/connection_ctrl.go
@@ -0,0 +1,95 @@
+package controlagent
+
+import (
+	"context"
+	"math"
+
+	"github.com/pkg/errors"
+	wiringapi "go.githedgehog.com/fabric/api/wiring/v1alpha2"
+	"go.githedgehog.com/fabric/pkg/manager/config"
+	apierrors "k8s.io/apimachinery/pkg/api/errors"
+	"k8s.io/apimachinery/pkg/runtime"
+	ctrl "sigs.k8s.io/controller-runtime"
+	"sigs.k8s.io/controller-runtime/pkg/client"
+	"sigs.k8s.io/controller-runtime/pkg/log"
+)
+
+type ConnectionReconciler struct {
+	client.Client
+	Scheme *runtime.Scheme
+	Cfg    *config.Fabric
+}
+
+func SetupWithManager(cfgBasedir string, mgr ctrl.Manager, cfg *config.Fabric) error {
+	r := &ConnectionReconciler{
+		Client: mgr.GetClient(),
+		Scheme: mgr.GetScheme(),
+		Cfg:    cfg,
+	}
+
+	return ctrl.NewControllerManagedBy(mgr).
+		Named("connection").
+		For(&wiringapi.Connection{}).
+		Complete(r)
+}
+
+//+kubebuilder:rbac:groups=wiring.githedgehog.com,resources=connections,verbs=get;list;watch
+//+kubebuilder:rbac:groups=wiring.githedgehog.com,resources=connections/status,verbs=get;update;patch
+
+func (r *ConnectionReconciler) Reconcile(ctx context.Context, req ctrl.Request) (ctrl.Result, error) {
+	l := log.FromContext(ctx)
+
+	conn := &wiringapi.Connection{}
+	err := r.Get(ctx, req.NamespacedName, conn)
+	if err != nil {
+		if apierrors.IsNotFound(err) {
+			return ctrl.Result{}, nil
+		}
+		return ctrl.Result{}, errors.Wrapf(err, "error getting connection")
+	}
+
+	if conn.Spec.ESLAG != nil {
+		return r.reconcileESLAG(ctx, conn)
+	}
+
+	l.Info("connection reconciled")
+
+	return ctrl.Result{}, nil
+}
+
+func (r *ConnectionReconciler) reconcileESLAG(ctx context.Context, conn *wiringapi.Connection) (ctrl.Result, error) {
+	l := log.FromContext(ctx)
+
+	if conn.Status.SystemID != 0 {
+		return ctrl.Result{}, nil
+	}
+
+	connList := &wiringapi.ConnectionList{}
+	if err := r.List(ctx, connList, client.MatchingLabels{
+		wiringapi.LabelConnectionType: wiringapi.CONNECTION_TYPE_ESLAG,
+	}); err != nil {
+		return ctrl.Result{}, errors.Wrapf(err, "error listing ESLAG connections")
+	}
+
+	taken := map[uint32]bool{}
+	for _, c := range connList.Items {
+		if c.Status.SystemID != 0 {
+			taken[c.Status.SystemID] = true
+		}
+	}
+
+	for id := uint32(1); id < math.MaxUint32; id++ {
+		if !taken[id] {
+			conn.Status.SystemID = id
+			break
+		}
+	}
+
+	if err := r.Status().Update(ctx, conn); err != nil {
+		return ctrl.Result{}, errors.Wrapf(err, "error updating connection status")
+	}
+
+	l.Info("assigned system ID to ESLAG connection", "systemID", conn.Status.SystemID, "connection", conn.Name)
+
+	return ctrl.Result{}, nil
+}