diff --git a/erpnext/stock/doctype/item/item.js b/erpnext/stock/doctype/item/item.js
index 03b93c0..d8f1f30 100644
--- a/erpnext/stock/doctype/item/item.js
+++ b/erpnext/stock/doctype/item/item.js
@@ -103,6 +103,11 @@
 				frappe.set_route("Form", "Item Variant Settings");
 			}, __("View"));
 		}
+
+		if(frm.doc.__onload && frm.doc.__onload.stock_exists) {
+			// Hide variants section if stock exists
+			frm.toggle_display("variants_section", 0);
+		}
 	},
 
 	validate: function(frm){
diff --git a/erpnext/stock/doctype/item/item.py b/erpnext/stock/doctype/item/item.py
index a810665..41a23a4 100644
--- a/erpnext/stock/doctype/item/item.py
+++ b/erpnext/stock/doctype/item/item.py
@@ -17,6 +17,7 @@
 	make_variant_item_code, validate_item_variant_attributes, ItemVariantExistsError)
 
 class DuplicateReorderRows(frappe.ValidationError): pass
+class StockExistsForTemplate(frappe.ValidationError): pass
 
 class Item(WebsiteGenerator):
 	website = frappe._dict(
@@ -28,11 +29,15 @@
 
 	def onload(self):
 		super(Item, self).onload()
+
 		self.set_onload('sle_exists', self.check_if_sle_exists())
 		if self.is_fixed_asset:
 			asset = frappe.db.get_all("Asset", filters={"item_code": self.name, "docstatus": 1}, limit=1)
 			self.set_onload("asset_exists", True if asset else False)
 
+		if frappe.db.get_value('Stock Ledger Entry', {'item_code': self.name}):
+			self.set_onload('stock_exists', True)
+
 	def autoname(self):
 		if frappe.db.get_default("item_naming_by")=="Naming Series":
 			if self.variant_of:
@@ -85,6 +90,7 @@
 		self.synced_with_hub = 0
 
 		self.validate_has_variants()
+		self.validate_stock_exists_for_template_item()
 		self.validate_attributes()
 		self.validate_variant_attributes()
 		self.validate_website_image()
@@ -631,6 +637,12 @@
 			if frappe.db.exists("Item", {"variant_of": self.name}):
 				frappe.throw(_("Item has variants."))
 
+	def validate_stock_exists_for_template_item(self):
+		if self.has_variants and \
+			frappe.db.get_value('Stock Ledger Entry', {'item_code': self.name}):
+			frappe.throw(_("As stock exists against an item {0}, you can not enable has variants property")
+				.format(self.name), StockExistsForTemplate)
+
 	def validate_uom(self):
 		if not self.get("__islocal"):
 			check_stock_uom_with_bin(self.name, self.stock_uom)
diff --git a/erpnext/stock/doctype/item/test_item.py b/erpnext/stock/doctype/item/test_item.py
index c3f399a..673d0f9 100644
--- a/erpnext/stock/doctype/item/test_item.py
+++ b/erpnext/stock/doctype/item/test_item.py
@@ -8,6 +8,7 @@
 from frappe.test_runner import make_test_records
 from erpnext.controllers.item_variant import (create_variant, ItemVariantExistsError,
 	InvalidItemAttributeValueError, get_variant)
+from erpnext.stock.doctype.item.item import StockExistsForTemplate
 
 from frappe.model.rename_doc import rename_doc
 from erpnext.stock.doctype.stock_entry.stock_entry_utils import make_stock_entry
@@ -263,6 +264,15 @@
 		self.assertEquals(variant.manufacturer, 'MSG1')
 		self.assertEquals(variant.manufacturer_part_no, '007')
 
+	def test_stock_exists_against_template_item(self):
+		stock_item = frappe.get_all('Stock Ledger Entry', fields = ["item_code"], limit=1)
+		if stock_item:
+			item_code = stock_item[0].item_code
+
+			item_doc = frappe.get_doc('Item', item_code)
+			item_doc.has_variants = 1
+			self.assertRaises(StockExistsForTemplate, item_doc.save)
+
 def set_item_variant_settings(fields):
 	doc = frappe.get_doc('Item Variant Settings')
 	doc.set('fields', fields)