diff --git a/cmd/cloudflared/tunnel/cmd.go b/cmd/cloudflared/tunnel/cmd.go
index 27911960..049dc25a 100644
--- a/cmd/cloudflared/tunnel/cmd.go
+++ b/cmd/cloudflared/tunnel/cmd.go
@@ -395,8 +395,8 @@ func StartServer(c *cli.Context, version string, shutdownC, graceShutdownC chan
 			uploadManager.Start()
 		}
 
-		sshServerAddress := "127.0.0.1:" + c.String(sshPortFlag)
-		server, err := sshserver.New(logManager, logger, version, sshServerAddress, shutdownC, c.Duration(sshIdleTimeoutFlag), c.Duration(sshMaxTimeoutFlag))
+		localServerAddress := "127.0.0.1:" + c.String(sshPortFlag)
+		server, err := sshserver.New(logManager, logger, version, localServerAddress, c.String("hostname"), shutdownC, c.Duration(sshIdleTimeoutFlag), c.Duration(sshMaxTimeoutFlag))
 		if err != nil {
 			msg := "Cannot create new SSH Server"
 			logger.WithError(err).Error(msg)
@@ -411,7 +411,7 @@ func StartServer(c *cli.Context, version string, shutdownC, graceShutdownC chan
 			// TODO: remove when declarative tunnels are implemented.
 			close(shutdownC)
 		}()
-		c.Set("url", "ssh://"+sshServerAddress)
+		c.Set("url", "ssh://"+localServerAddress)
 	}
 
 	if host := hostnameFromURI(c.String("url")); host != "" {
diff --git a/sshgen/sshgen.go b/sshgen/sshgen.go
index 12538c84..2d6f326b 100644
--- a/sshgen/sshgen.go
+++ b/sshgen/sshgen.go
@@ -8,7 +8,6 @@ import (
 	"crypto/x509"
 	"encoding/json"
 	"encoding/pem"
-	"errors"
 	"fmt"
 	"io"
 	"io/ioutil"
@@ -20,6 +19,7 @@ import (
 	cfpath "github.com/cloudflare/cloudflared/cmd/cloudflared/path"
 	"github.com/coreos/go-oidc/jose"
 	homedir "github.com/mitchellh/go-homedir"
+	"github.com/pkg/errors"
 	gossh "golang.org/x/crypto/ssh"
 )
 
@@ -73,48 +73,54 @@ func GenerateShortLivedCertificate(appURL *url.URL, token string) error {
 // handleCertificateGeneration takes a JWT and uses it build a signPayload
 // to send to the Sign endpoint with the public key from the keypair it generated
 func handleCertificateGeneration(token, fullName string) (string, error) {
+	pub, err := generateKeyPair(fullName)
+	if err != nil {
+		return "", err
+	}
+
+	return SignCert(token, string(pub))
+}
+
+func SignCert(token, pubKey string) (string, error) {
 	if token == "" {
 		return "", errors.New("invalid token")
 	}
 
 	jwt, err := jose.ParseJWT(token)
 	if err != nil {
-		return "", err
+		return "", errors.Wrap(err, "failed to parse JWT")
 	}
 
 	claims, err := jwt.Claims()
 	if err != nil {
-		return "", err
+		return "", errors.Wrap(err, "failed to retrieve JWT claims")
 	}
 
 	issuer, _, err := claims.StringClaim("iss")
 	if err != nil {
-		return "", err
-	}
-
-	pub, err := generateKeyPair(fullName)
-	if err != nil {
-		return "", err
+		return "", errors.Wrap(err, "failed to retrieve JWT iss")
 	}
 
 	buf, err := json.Marshal(&signPayload{
-		PublicKey: string(pub),
+		PublicKey: pubKey,
 		JWT:       token,
 		Issuer:    issuer,
 	})
 	if err != nil {
-		return "", err
+		return "", errors.Wrap(err, "failed to marshal signPayload")
 	}
-
 	var res *http.Response
 	if mockRequest != nil {
 		res, err = mockRequest(issuer+signEndpoint, "application/json", bytes.NewBuffer(buf))
 	} else {
-		res, err = http.Post(issuer+signEndpoint, "application/json", bytes.NewBuffer(buf))
+		client := http.Client{
+			Timeout: 10 * time.Second,
+		}
+		res, err = client.Post(issuer+signEndpoint, "application/json", bytes.NewBuffer(buf))
 	}
 
 	if err != nil {
-		return "", err
+		return "", errors.Wrap(err, "failed to send request")
 	}
 	defer res.Body.Close()
 
@@ -130,9 +136,9 @@ func handleCertificateGeneration(token, fullName string) (string, error) {
 
 	var signRes signResponse
 	if err := decoder.Decode(&signRes); err != nil {
-		return "", err
+		return "", errors.Wrap(err, "failed to decode HTTP response")
 	}
-	return signRes.Certificate, err
+	return signRes.Certificate, nil
 }
 
 // generateKeyPair creates a EC keypair (P256) and stores them in the homedir.
diff --git a/sshserver/sshserver_unix.go b/sshserver/sshserver_unix.go
index f8e1adba..eeb05f23 100644
--- a/sshserver/sshserver_unix.go
+++ b/sshserver/sshserver_unix.go
@@ -3,6 +3,9 @@
 package sshserver
 
 import (
+	"crypto/ecdsa"
+	"crypto/elliptic"
+	"crypto/rand"
 	"encoding/binary"
 	"encoding/json"
 	"fmt"
@@ -13,6 +16,7 @@ import (
 	"strings"
 	"time"
 
+	"github.com/cloudflare/cloudflared/sshgen"
 	"github.com/cloudflare/cloudflared/sshlog"
 	"github.com/gliderlabs/ssh"
 	"github.com/google/uuid"
@@ -30,8 +34,9 @@ const (
 	auditEventShell       = "shell"
 	sshContextSessionID   = "sessionID"
 	sshContextEventLogger = "eventLogger"
-	sshContextDestination = "sshDest"
-	sshPreambleLength     = 4
+	sshContextPreamble    = "sshPreamble"
+	sshContextSSHClient   = "sshClient"
+	SSHPreambleLength     = 4
 )
 
 type auditEvent struct {
@@ -41,31 +46,53 @@ type auditEvent struct {
 	User        string `json:"user,omitempty"`
 	Login       string `json:"login,omitempty"`
 	Datetime    string `json:"datetime,omitempty"`
+	Hostname    string `json:"hostname,omitempty"`
 	Destination string `json:"destination,omitempty"`
 }
 
+// sshConn wraps the incoming net.Conn and a cleanup function
+// This is done to allow the outgoing SSH client to be retrieved and closed when the conn itself is closed.
+type sshConn struct {
+	net.Conn
+	cleanupFunc func()
+}
+
+// close calls the cleanupFunc before closing the conn
+func (c sshConn) Close() error {
+	c.cleanupFunc()
+	return c.Conn.Close()
+}
+
 type SSHProxy struct {
 	ssh.Server
+	hostname   string
 	logger     *logrus.Logger
 	shutdownC  chan struct{}
 	caCert     ssh.PublicKey
 	logManager sshlog.Manager
 }
 
+type SSHPreamble struct {
+	Destination string
+	JWT         string
+}
+
 // New creates a new SSHProxy and configures its host keys and authentication by the data provided
-func New(logManager sshlog.Manager, logger *logrus.Logger, version, address string, shutdownC chan struct{}, idleTimeout, maxTimeout time.Duration) (*SSHProxy, error) {
+func New(logManager sshlog.Manager, logger *logrus.Logger, version, localAddress, hostname string, shutdownC chan struct{}, idleTimeout, maxTimeout time.Duration) (*SSHProxy, error) {
 	sshProxy := SSHProxy{
+		hostname:   hostname,
 		logger:     logger,
 		shutdownC:  shutdownC,
 		logManager: logManager,
 	}
 
 	sshProxy.Server = ssh.Server{
-		Addr:         address,
-		MaxTimeout:   maxTimeout,
-		IdleTimeout:  idleTimeout,
-		Version:      fmt.Sprintf("SSH-2.0-Cloudflare-Access_%s_%s", version, runtime.GOOS),
-		ConnCallback: sshProxy.connCallback,
+		Addr:             localAddress,
+		MaxTimeout:       maxTimeout,
+		IdleTimeout:      idleTimeout,
+		Version:          fmt.Sprintf("SSH-2.0-Cloudflare-Access_%s_%s", version, runtime.GOOS),
+		PublicKeyHandler: sshProxy.proxyAuthCallback,
+		ConnCallback:     sshProxy.connCallback,
 		ChannelHandlers: map[string]ssh.ChannelHandler{
 			"default": sshProxy.channelHandler,
 		},
@@ -92,23 +119,54 @@ func (s *SSHProxy) Start() error {
 	return s.ListenAndServe()
 }
 
+// proxyAuthCallback attempts to connect to ultimate SSH destination. If successful, it allows the incoming connection
+// to connect to the proxy and saves the outgoing SSH client to the context. Otherwise, no connection to the
+// the proxy is allowed.
+func (s *SSHProxy) proxyAuthCallback(ctx ssh.Context, key ssh.PublicKey) bool {
+	client, err := s.dialDestination(ctx)
+	if err != nil {
+		return false
+	}
+	ctx.SetValue(sshContextSSHClient, client)
+	return true
+}
+
+// connCallback reads the preamble sent from the proxy server and saves an audit event logger to the context.
+// If any errors occur, the connection is terminated by returning nil from the callback.
 func (s *SSHProxy) connCallback(ctx ssh.Context, conn net.Conn) net.Conn {
 	// AUTH-2050: This is a temporary workaround of a timing issue in the tunnel muxer to allow further testing.
 	// TODO: Remove this
 	time.Sleep(10 * time.Millisecond)
 
-	if err := s.configureSSHDestination(conn, ctx); err != nil {
-		if err != io.EOF {
-			s.logger.WithError(err).Error("failed to read SSH destination")
+	preamble, err := s.readPreamble(conn)
+	if err != nil {
+		if netErr, ok := err.(net.Error); ok && netErr.Timeout() {
+			s.logger.Warn("Could not establish session. Client likely does not have --destination set and is using old-style ssh config")
+		} else if err != io.EOF {
+			s.logger.WithError(err).Error("failed to read SSH preamble")
 		}
 		return nil
 	}
+	ctx.SetValue(sshContextPreamble, preamble)
 
-	if err := s.configureLogger(ctx); err != nil {
+	logger, sessionID, err := s.auditLogger()
+	if err != nil {
 		s.logger.WithError(err).Error("failed to configure logger")
 		return nil
 	}
-	return conn
+	ctx.SetValue(sshContextEventLogger, logger)
+	ctx.SetValue(sshContextSessionID, sessionID)
+
+	// attempts to retrieve and close the outgoing ssh client when the incoming conn is closed.
+	// If no client exists, the conn is being closed before the PublicKeyCallback was called (where the client is created).
+	cleanupFunc := func() {
+		client, ok := ctx.Value(sshContextSSHClient).(*gossh.Client)
+		if ok && client != nil {
+			client.Close()
+		}
+	}
+
+	return sshConn{conn, cleanupFunc}
 }
 
 // channelHandler proxies incoming and outgoing SSH traffic back and forth over an SSH Channel
@@ -129,13 +187,12 @@ func (s *SSHProxy) channelHandler(srv *ssh.Server, conn *gossh.ServerConn, newCh
 	}
 	defer localChan.Close()
 
-	// AUTH-2136 TODO: multiplex ssh client between channels
-	client, err := s.createSSHClient(ctx)
-	if err != nil {
-		s.logger.WithError(err).Error("Failed to dial remote server")
+	// client will be closed when the sshConn is closed
+	client, ok := ctx.Value(sshContextSSHClient).(*gossh.Client)
+	if !ok {
+		s.logger.Error("Could not retrieve client from context")
 		return
 	}
-	defer client.Close()
 
 	remoteChan, remoteChanReqs, err := client.OpenChannel(newChan.ChannelType(), newChan.ExtraData())
 	if err != nil {
@@ -196,54 +253,116 @@ func (s *SSHProxy) proxyChannel(localChan, remoteChan gossh.Channel, localChanRe
 	}
 }
 
-// configureSSHDestination reads a preamble from the SSH connection before any SSH traffic is sent.
-// This preamble contains the ultimate SSH destination the proxy will connect too.
-// The first 4 bytes contain the length of the destination which follows immediately.
-func (s *SSHProxy) configureSSHDestination(conn net.Conn, ctx ssh.Context) error {
-	size := make([]byte, sshPreambleLength)
+// readPreamble reads a preamble from the SSH connection before any SSH traffic is sent.
+// This preamble is a JSON encoded struct containing the users JWT and ultimate destination.
+// The first 4 bytes contain the length of the preamble which follows immediately.
+func (s *SSHProxy) readPreamble(conn net.Conn) (*SSHPreamble, error) {
+	// Set conn read deadline while reading preamble to prevent hangs if preamble wasnt sent.
+	if err := conn.SetReadDeadline(time.Now().Add(500 * time.Millisecond)); err != nil {
+		return nil, errors.Wrap(err, "failed to set conn deadline")
+	}
+	defer func() {
+		if err := conn.SetReadDeadline(time.Time{}); err != nil {
+			s.logger.WithError(err).Error("Failed to unset conn read deadline")
+		}
+	}()
+
+	size := make([]byte, SSHPreambleLength)
 	if _, err := io.ReadFull(conn, size); err != nil {
-		return err
+		return nil, err
 	}
 	payloadLength := binary.BigEndian.Uint32(size)
-	data := make([]byte, payloadLength)
-	if _, err := io.ReadFull(conn, data); err != nil {
-		return err
+	payload := make([]byte, payloadLength)
+	if _, err := io.ReadFull(conn, payload); err != nil {
+		return nil, err
 	}
 
-	destAddr := string(data)
-	destUrl, err := url.Parse(destAddr)
+	var preamble SSHPreamble
+	err := json.Unmarshal(payload, &preamble)
 	if err != nil {
-		return errors.Wrap(err, "failed to parse URL")
+		return nil, err
+	}
+
+	destUrl, err := url.Parse(preamble.Destination)
+	if err != nil {
+		return nil, errors.Wrap(err, "failed to parse URL")
 	}
 	if destUrl.Port() == "" {
-		destAddr += ":22"
+		preamble.Destination += ":22"
 	}
-	ctx.SetValue(sshContextDestination, destAddr)
-	return nil
+	return &preamble, nil
 }
 
-// createSSHClient creates a new SSH client and dials the destination server
-func (s *SSHProxy) createSSHClient(ctx ssh.Context) (*gossh.Client, error) {
+// dialDestination creates a new SSH client and dials the destination server
+func (s *SSHProxy) dialDestination(ctx ssh.Context) (*gossh.Client, error) {
+	preamble, ok := ctx.Value(sshContextPreamble).(*SSHPreamble)
+	if !ok {
+		msg := "failed to retrieve SSH preamble from context"
+		s.logger.Error(msg)
+		return nil, errors.New(msg)
+	}
+
+	signer, err := s.genSSHSigner(preamble.JWT)
+	if err != nil {
+		s.logger.WithError(err).Error("Failed to generate signed short lived cert")
+		return nil, err
+	}
+
 	clientConfig := &gossh.ClientConfig{
 		User: ctx.User(),
 		// AUTH-2103 TODO: proper host key check
 		HostKeyCallback: gossh.InsecureIgnoreHostKey(),
-		//  AUTH-2114 TODO: replace with short lived cert auth
-		Auth:          []gossh.AuthMethod{gossh.Password("test")},
-		ClientVersion: ctx.ServerVersion(),
+		Auth:            []gossh.AuthMethod{gossh.PublicKeys(signer)},
+		ClientVersion:   ctx.ServerVersion(),
 	}
 
-	address, ok := ctx.Value(sshContextDestination).(string)
-	if !ok {
-		return nil, errors.New("failed to retrieve SSH destination from context")
-	}
-	client, err := gossh.Dial("tcp", address, clientConfig)
+	client, err := gossh.Dial("tcp", preamble.Destination, clientConfig)
 	if err != nil {
+		s.logger.WithError(err).Info("Failed to connect to destination SSH server")
 		return nil, err
 	}
 	return client, nil
 }
 
+// Generates a key pair and sends public key to get signed by CA
+func (s *SSHProxy) genSSHSigner(jwt string) (gossh.Signer, error) {
+	key, err := ecdsa.GenerateKey(elliptic.P256(), rand.Reader)
+	if err != nil {
+		return nil, errors.Wrap(err, "failed to generate ecdsa key pair")
+	}
+
+	pub, err := gossh.NewPublicKey(&key.PublicKey)
+	if err != nil {
+		return nil, errors.Wrap(err, "failed to convert ecdsa public key to SSH public key")
+	}
+
+	pubBytes := gossh.MarshalAuthorizedKey(pub)
+	signedCertBytes, err := sshgen.SignCert(jwt, string(pubBytes))
+	if err != nil {
+		return nil, errors.Wrap(err, "failed to retrieve cert from SSHCAAPI")
+	}
+
+	signedPub, _, _, _, err := gossh.ParseAuthorizedKey([]byte(signedCertBytes))
+	if err != nil {
+		return nil, errors.Wrap(err, "failed to parse SSH public key")
+	}
+
+	cert, ok := signedPub.(*gossh.Certificate)
+	if !ok {
+		return nil, errors.Wrap(err, "failed to assert public key as certificate")
+	}
+	signer, err := gossh.NewSignerFromKey(key)
+	if err != nil {
+		return nil, errors.Wrap(err, "failed to create signer")
+	}
+
+	certSigner, err := gossh.NewCertSigner(cert, signer)
+	if err != nil {
+		return nil, errors.Wrap(err, "failed to create cert signer")
+	}
+	return certSigner, nil
+}
+
 // forwardChannelRequest sends request req to SSH channel sshChan, waits for reply, and sends the reply back.
 func (s *SSHProxy) forwardChannelRequest(sshChan gossh.Channel, req *gossh.Request) error {
 	reply, err := sshChan.SendRequest(req.Type, req.WantReply, req.Payload)
@@ -282,20 +401,18 @@ func (s *SSHProxy) logChannelRequest(req *gossh.Request, conn *gossh.ServerConn,
 	s.logAuditEvent(conn, event, eventType, ctx)
 }
 
-func (s *SSHProxy) configureLogger(ctx ssh.Context) error {
+func (s *SSHProxy) auditLogger() (io.WriteCloser, string, error) {
 	sessionUUID, err := uuid.NewRandom()
 	if err != nil {
-		return errors.Wrap(err, "failed to create sessionID")
+		return nil, "", errors.Wrap(err, "failed to create sessionID")
 	}
 	sessionID := sessionUUID.String()
 
 	writer, err := s.logManager.NewLogger(fmt.Sprintf("%s-event.log", sessionID), s.logger)
 	if err != nil {
-		return errors.Wrap(err, "failed to create logger")
+		return nil, "", errors.Wrap(err, "failed to create logger")
 	}
-	ctx.SetValue(sshContextEventLogger, writer)
-	ctx.SetValue(sshContextSessionID, sessionID)
-	return nil
+	return writer, sessionID, nil
 }
 
 func (s *SSHProxy) logAuditEvent(conn *gossh.ServerConn, event, eventType string, ctx ssh.Context) {
@@ -306,9 +423,12 @@ func (s *SSHProxy) logAuditEvent(conn *gossh.ServerConn, event, eventType string
 		return
 	}
 
-	destination, destOk := ctx.Value(sshContextDestination).(string)
-	if !destOk {
-		s.logger.Error("Failed to retrieve SSH destination from context")
+	var destination string
+	preamble, ok := ctx.Value(sshContextPreamble).(*SSHPreamble)
+	if ok {
+		destination = preamble.Destination
+	} else {
+		s.logger.Error("Failed to retrieve SSH preamble from context")
 	}
 
 	ae := auditEvent{
@@ -318,6 +438,7 @@ func (s *SSHProxy) logAuditEvent(conn *gossh.ServerConn, event, eventType string
 		User:        conn.User(),
 		Login:       conn.User(),
 		Datetime:    time.Now().UTC().Format(time.RFC3339),
+		Hostname:    s.hostname,
 		Destination: destination,
 	}
 	data, err := json.Marshal(&ae)
diff --git a/sshserver/sshserver_windows.go b/sshserver/sshserver_windows.go
index d5f89744..085d6e08 100644
--- a/sshserver/sshserver_windows.go
+++ b/sshserver/sshserver_windows.go
@@ -13,7 +13,12 @@ import (
 
 type SSHServer struct{}
 
-func New(_ sshlog.Manager, _ *logrus.Logger, _, _ string, _ chan struct{}, _, _ time.Duration) (*SSHServer, error) {
+type SSHPreamble struct {
+	Destination string
+	JWT         string
+}
+
+func New(_ sshlog.Manager, _ *logrus.Logger, _, _, _ string, _ chan struct{}, _, _ time.Duration) (*SSHServer, error) {
 	return nil, errors.New("cloudflared ssh server is not supported on windows")
 }
 
diff --git a/websocket/websocket.go b/websocket/websocket.go
index 26436610..4ada6190 100644
--- a/websocket/websocket.go
+++ b/websocket/websocket.go
@@ -6,12 +6,14 @@ import (
 	"crypto/tls"
 	"encoding/base64"
 	"encoding/binary"
+	"encoding/json"
 	"errors"
 	"io"
 	"net"
 	"net/http"
 	"time"
 
+	"github.com/cloudflare/cloudflared/sshserver"
 	"github.com/gorilla/websocket"
 	"github.com/sirupsen/logrus"
 )
@@ -155,9 +157,11 @@ func StartProxyServer(logger *logrus.Logger, listener net.Listener, remote strin
 			conn.Close()
 		}()
 
+		token := r.Header.Get("cf-access-token")
 		if destination := r.Header.Get("CF-Access-SSH-Destination"); destination != "" {
-			if err := sendSSHDestination(stream, destination); err != nil {
-				logger.WithError(err).Error("Failed to send SSH destination")
+			if err := sendSSHPreamble(stream, destination, token); err != nil {
+				logger.WithError(err).Error("Failed to send SSH preamble")
+				return
 			}
 		}
 
@@ -167,16 +171,22 @@ func StartProxyServer(logger *logrus.Logger, listener net.Listener, remote strin
 	return httpServer.Serve(listener)
 }
 
-// sendSSHDestination sends the final SSH destination address to the cloudflared SSH proxy
+// sendSSHPreamble sends the final SSH destination address to the cloudflared SSH proxy
 // The destination is preceded by its length
-func sendSSHDestination(stream net.Conn, destination string) error {
-	sizeBytes := make([]byte, 4)
-	binary.BigEndian.PutUint32(sizeBytes, uint32(len(destination)))
+func sendSSHPreamble(stream net.Conn, destination, token string) error {
+	preamble := &sshserver.SSHPreamble{Destination: destination, JWT: token}
+	payload, err := json.Marshal(preamble)
+	if err != nil {
+		return err
+	}
+
+	sizeBytes := make([]byte, sshserver.SSHPreambleLength)
+	binary.BigEndian.PutUint32(sizeBytes, uint32(len(payload)))
 	if _, err := stream.Write(sizeBytes); err != nil {
 		return err
 	}
 
-	if _, err := stream.Write([]byte(destination)); err != nil {
+	if _, err := stream.Write(payload); err != nil {
 		return err
 	}
 	return nil