Does upgrading from Ubuntu 14.04 to 16.04.1 via Destroy-Rebuild process convert droplet to new kernel management platform?

I understand that Digital Ocean has changed the way Ubuntu kernels are managed. I don’t know the details. However, I also understand that if I create a new droplet with Ubuntu 16.04.1, it will use the new kernel management platform.

My question is: if I destroy-rebuild an existing Ubuntu 14.04 droplet using the base Ubuntu 16.04.1 image, will the droplet then be using the new kernel management platform?

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Yes. Rebuilding an old Droplet will give you the new “internally managed” kernels. Though be aware that any data you have on the Droplet itself will be lost. Rebuilding essentially gives you a brand new Droplet, but it retains its name and IP address.

If you’d like to use the “internally managed” kernels without rebuilding your Droplet, you can set the “DigitalOcean GrubLoader” from your Droplet’s kernel menu.

Droplet kernel menu

You can find more info in this tutorial: