diff --git a/daemon/images/image_squash.go b/daemon/images/image_squash.go
new file mode 100644
index 0000000000..4560f5047c
--- /dev/null
+++ b/daemon/images/image_squash.go
@@ -0,0 +1,95 @@
+package images // import "github.com/docker/docker/daemon/images"
+
+import (
+	"encoding/json"
+	"fmt"
+	"time"
+
+	"github.com/docker/docker/image"
+	"github.com/docker/docker/layer"
+	"github.com/pkg/errors"
+)
+
+// SquashImage creates a new image with the diff of the specified image and the specified parent.
+// This new image contains only the layers from it's parent + 1 extra layer which contains the diff of all the layers in between.
+// The existing image(s) is not destroyed.
+// If no parent is specified, a new image with the diff of all the specified image's layers merged into a new layer that has no parents.
+func (i *ImageService) SquashImage(id, parent string) (string, error) {
+
+	var (
+		img *image.Image
+		err error
+	)
+	if img, err = i.imageStore.Get(image.ID(id)); err != nil {
+		return "", err
+	}
+
+	var parentImg *image.Image
+	var parentChainID layer.ChainID
+	if len(parent) != 0 {
+		parentImg, err = i.imageStore.Get(image.ID(parent))
+		if err != nil {
+			return "", errors.Wrap(err, "error getting specified parent layer")
+		}
+		parentChainID = parentImg.RootFS.ChainID()
+	} else {
+		rootFS := image.NewRootFS()
+		parentImg = &image.Image{RootFS: rootFS}
+	}
+	l, err := i.layerStore.Get(img.RootFS.ChainID())
+	if err != nil {
+		return "", errors.Wrap(err, "error getting image layer")
+	}
+	defer i.layerStore.Release(l)
+
+	ts, err := l.TarStreamFrom(parentChainID)
+	if err != nil {
+		return "", errors.Wrapf(err, "error getting tar stream to parent")
+	}
+	defer ts.Close()
+
+	newL, err := i.layerStore.Register(ts, parentChainID)
+	if err != nil {
+		return "", errors.Wrap(err, "error registering layer")
+	}
+	defer i.layerStore.Release(newL)
+
+	newImage := *img
+	newImage.RootFS = nil
+
+	rootFS := *parentImg.RootFS
+	rootFS.DiffIDs = append(rootFS.DiffIDs, newL.DiffID())
+	newImage.RootFS = &rootFS
+
+	for i, hi := range newImage.History {
+		if i >= len(parentImg.History) {
+			hi.EmptyLayer = true
+		}
+		newImage.History[i] = hi
+	}
+
+	now := time.Now()
+	var historyComment string
+	if len(parent) > 0 {
+		historyComment = fmt.Sprintf("merge %s to %s", id, parent)
+	} else {
+		historyComment = fmt.Sprintf("create new from %s", id)
+	}
+
+	newImage.History = append(newImage.History, image.History{
+		Created: now,
+		Comment: historyComment,
+	})
+	newImage.Created = now
+
+	b, err := json.Marshal(&newImage)
+	if err != nil {
+		return "", errors.Wrap(err, "error marshalling image config")
+	}
+
+	newImgID, err := i.imageStore.Create(b)
+	if err != nil {
+		return "", errors.Wrap(err, "error creating new image after squash")
+	}
+	return string(newImgID), nil
+}
diff --git a/daemon/images/images.go b/daemon/images/images.go
index 53dfa02b71..e00e6ec5b8 100644
--- a/daemon/images/images.go
+++ b/daemon/images/images.go
@@ -2,12 +2,8 @@ package images // import "github.com/docker/docker/daemon/images"
 
 import (
 	"context"
-	"encoding/json"
 	"fmt"
 	"sort"
-	"time"
-
-	"github.com/pkg/errors"
 
 	"github.com/docker/distribution/reference"
 	"github.com/docker/docker/api/types"
@@ -247,90 +243,6 @@ func (i *ImageService) Images(_ context.Context, opts types.ImageListOptions) ([
 	return summaries, nil
 }
 
-// SquashImage creates a new image with the diff of the specified image and the specified parent.
-// This new image contains only the layers from it's parent + 1 extra layer which contains the diff of all the layers in between.
-// The existing image(s) is not destroyed.
-// If no parent is specified, a new image with the diff of all the specified image's layers merged into a new layer that has no parents.
-func (i *ImageService) SquashImage(id, parent string) (string, error) {
-
-	var (
-		img *image.Image
-		err error
-	)
-	if img, err = i.imageStore.Get(image.ID(id)); err != nil {
-		return "", err
-	}
-
-	var parentImg *image.Image
-	var parentChainID layer.ChainID
-	if len(parent) != 0 {
-		parentImg, err = i.imageStore.Get(image.ID(parent))
-		if err != nil {
-			return "", errors.Wrap(err, "error getting specified parent layer")
-		}
-		parentChainID = parentImg.RootFS.ChainID()
-	} else {
-		rootFS := image.NewRootFS()
-		parentImg = &image.Image{RootFS: rootFS}
-	}
-	l, err := i.layerStore.Get(img.RootFS.ChainID())
-	if err != nil {
-		return "", errors.Wrap(err, "error getting image layer")
-	}
-	defer i.layerStore.Release(l)
-
-	ts, err := l.TarStreamFrom(parentChainID)
-	if err != nil {
-		return "", errors.Wrapf(err, "error getting tar stream to parent")
-	}
-	defer ts.Close()
-
-	newL, err := i.layerStore.Register(ts, parentChainID)
-	if err != nil {
-		return "", errors.Wrap(err, "error registering layer")
-	}
-	defer i.layerStore.Release(newL)
-
-	newImage := *img
-	newImage.RootFS = nil
-
-	rootFS := *parentImg.RootFS
-	rootFS.DiffIDs = append(rootFS.DiffIDs, newL.DiffID())
-	newImage.RootFS = &rootFS
-
-	for i, hi := range newImage.History {
-		if i >= len(parentImg.History) {
-			hi.EmptyLayer = true
-		}
-		newImage.History[i] = hi
-	}
-
-	now := time.Now()
-	var historyComment string
-	if len(parent) > 0 {
-		historyComment = fmt.Sprintf("merge %s to %s", id, parent)
-	} else {
-		historyComment = fmt.Sprintf("create new from %s", id)
-	}
-
-	newImage.History = append(newImage.History, image.History{
-		Created: now,
-		Comment: historyComment,
-	})
-	newImage.Created = now
-
-	b, err := json.Marshal(&newImage)
-	if err != nil {
-		return "", errors.Wrap(err, "error marshalling image config")
-	}
-
-	newImgID, err := i.imageStore.Create(b)
-	if err != nil {
-		return "", errors.Wrap(err, "error creating new image after squash")
-	}
-	return string(newImgID), nil
-}
-
 func newImageSummary(image *image.Image, size int64) *types.ImageSummary {
 	summary := &types.ImageSummary{
 		ParentID:    image.Parent.String(),