diff --git a/server/src/api/controllers/Items.ts b/server/src/api/controllers/Items.ts
index b029e8447..d6a083723 100644
--- a/server/src/api/controllers/Items.ts
+++ b/server/src/api/controllers/Items.ts
@@ -538,6 +538,15 @@ export default class ItemsController extends BaseController {
           ],
         });
       }
+      if (error.errorType === 'ITEM_CANNOT_CHANGE_INVENTORY_TYPE') {
+        return res.status(400).send({
+          errors: [{
+            type: 'ITEM_CANNOT_CHANGE_INVENTORY_TYPE',
+            message: 'Cannot change inventory item type',
+            code: 340,
+          }],
+        });
+      }
     }
     next(error);
   }
diff --git a/server/src/services/Items/ItemsService.ts b/server/src/services/Items/ItemsService.ts
index d3046fe8c..d36724ffc 100644
--- a/server/src/services/Items/ItemsService.ts
+++ b/server/src/services/Items/ItemsService.ts
@@ -227,6 +227,37 @@ export default class ItemsService implements IItemsService {
     };
   }
 
+  /**
+   *
+   * @param {IItemDTO} itemDTO - Item DTO.
+   * @param {IItem} oldItem -
+   */
+  private transformEditItemDTOToModel(itemDTO: IItemDTO, oldItem: IItem) {
+    return {
+      ...itemDTO,
+      ...(itemDTO.type === 'inventory' && oldItem.type !== 'inventory'
+        ? {
+            quantityOnHand: 0,
+          }
+        : {}),
+    };
+  }
+
+  /**
+   * Validate item type in edit item mode, cannot change item inventory type.
+   * @param {IItemDTO} itemDTO
+   * @param {IItem} oldItem
+   */
+  private validateEditItemInventoryType(itemDTO: IItemDTO, oldItem: IItem) {
+    if (
+      itemDTO.type &&
+      oldItem.type === 'inventory' &&
+      itemDTO.type !== oldItem.type
+    ) {
+      throw new ServiceError(ERRORS.ITEM_CANNOT_CHANGE_INVENTORY_TYPE);
+    }
+  }
+
   /**
    * Creates a new item.
    * @param {number} tenantId DTO
@@ -288,6 +319,11 @@ export default class ItemsService implements IItemsService {
     // Validates the given item existance on the storage.
     const oldItem = await this.getItemOrThrowError(tenantId, itemId);
 
+    this.validateEditItemInventoryType(itemDTO, oldItem);
+
+    // Transform the edit item DTO to model.
+    const itemModel = this.transformEditItemDTOToModel(itemDTO, oldItem);
+
     // Validate whether the given item name already exists on the storage.
     await this.validateItemNameUniquiness(tenantId, itemDTO.name, itemId);
 
@@ -318,7 +354,7 @@ export default class ItemsService implements IItemsService {
     }
 
     const newItem = await Item.query().patchAndFetchById(itemId, {
-      ...itemDTO,
+      ...itemModel,
     });
     this.logger.info('[items] item edited successfully.', {
       tenantId,
diff --git a/server/src/services/Items/constants.ts b/server/src/services/Items/constants.ts
index 927137e8a..0bafbe384 100644
--- a/server/src/services/Items/constants.ts
+++ b/server/src/services/Items/constants.ts
@@ -1,4 +1,3 @@
-
 export const ERRORS = {
   NOT_FOUND: 'NOT_FOUND',
   ITEMS_NOT_FOUND: 'ITEMS_NOT_FOUND',
@@ -18,4 +17,5 @@ export const ERRORS = {
 
   ITEM_HAS_ASSOCIATED_INVENTORY_ADJUSTMENT:
     'ITEM_HAS_ASSOCIATED_INVENTORY_ADJUSTMENT',
+  ITEM_CANNOT_CHANGE_INVENTORY_TYPE: 'ITEM_CANNOT_CHANGE_INVENTORY_TYPE',
 };