diff --git a/channeldb/invoice_test.go b/channeldb/invoice_test.go
index f0d667332..fcc959516 100644
--- a/channeldb/invoice_test.go
+++ b/channeldb/invoice_test.go
@@ -3146,6 +3146,65 @@ func TestDeleteInvoices(t *testing.T) {
 	assertInvoiceCount(0)
 }
 
+// TestDeleteCanceledInvoices tests that deleting canceled invoices with the
+// specific DeleteCanceledInvoices method works correctly.
+func TestDeleteCanceledInvoices(t *testing.T) {
+	t.Parallel()
+
+	db, err := MakeTestInvoiceDB(t)
+	require.NoError(t, err, "unable to make test db")
+
+	// Updatefunc is used to cancel an invoice.
+	updateFunc := func(invoice *invpkg.Invoice) (
+		*invpkg.InvoiceUpdateDesc, error) {
+
+		return &invpkg.InvoiceUpdateDesc{
+			UpdateType: invpkg.CancelInvoiceUpdate,
+			State: &invpkg.InvoiceStateUpdateDesc{
+				NewState: invpkg.ContractCanceled,
+			},
+		}, nil
+	}
+
+	// Add some invoices to the test db.
+	ctxb := context.Background()
+	var invoices []invpkg.Invoice
+	for i := 0; i < 10; i++ {
+		invoice, err := randInvoice(lnwire.MilliSatoshi(i + 1))
+		require.NoError(t, err)
+
+		paymentHash := invoice.Terms.PaymentPreimage.Hash()
+		_, err = db.AddInvoice(ctxb, invoice, paymentHash)
+		require.NoError(t, err)
+
+		// Cancel every second invoice.
+		if i%2 == 0 {
+			invoice, err = db.UpdateInvoice(
+				ctxb, invpkg.InvoiceRefByHash(paymentHash), nil,
+				updateFunc,
+			)
+			require.NoError(t, err)
+		} else {
+			invoices = append(invoices, *invoice)
+		}
+	}
+
+	// Delete canceled invoices.
+	require.NoError(t, db.DeleteCanceledInvoices(ctxb))
+
+	// Query to collect all invoices.
+	query := invpkg.InvoiceQuery{
+		IndexOffset:    0,
+		NumMaxInvoices: math.MaxUint64,
+	}
+
+	dbInvoices, err := db.QueryInvoices(ctxb, query)
+	require.NoError(t, err)
+
+	// Check that we really have the expected invoices.
+	require.Equal(t, invoices, dbInvoices.Invoices)
+}
+
 // TestAddInvoiceInvalidFeatureDeps asserts that inserting an invoice with
 // invalid transitive feature dependencies fails with the appropriate error.
 func TestAddInvoiceInvalidFeatureDeps(t *testing.T) {
diff --git a/channeldb/invoices.go b/channeldb/invoices.go
index cc665d097..608491e69 100644
--- a/channeldb/invoices.go
+++ b/channeldb/invoices.go
@@ -2761,6 +2761,102 @@ func delAMPSettleIndex(invoiceNum []byte, invoices,
 	return nil
 }
 
+// DeleteCanceledInvoices deletes all canceled invoices from the database.
+func (d *DB) DeleteCanceledInvoices(_ context.Context) error {
+	return kvdb.Update(d, func(tx kvdb.RwTx) error {
+		invoices := tx.ReadWriteBucket(invoiceBucket)
+		if invoices == nil {
+			return nil
+		}
+
+		invoiceIndex := invoices.NestedReadWriteBucket(
+			invoiceIndexBucket,
+		)
+		if invoiceIndex == nil {
+			return invpkg.ErrNoInvoicesCreated
+		}
+
+		invoiceAddIndex := invoices.NestedReadWriteBucket(
+			addIndexBucket,
+		)
+		if invoiceAddIndex == nil {
+			return invpkg.ErrNoInvoicesCreated
+		}
+
+		payAddrIndex := tx.ReadWriteBucket(payAddrIndexBucket)
+
+		return invoiceIndex.ForEach(func(k, v []byte) error {
+			// Skip the special numInvoicesKey as that does not
+			// point to a valid invoice.
+			if bytes.Equal(k, numInvoicesKey) {
+				return nil
+			}
+
+			// Skip sub-buckets.
+			if v == nil {
+				return nil
+			}
+
+			invoice, err := fetchInvoice(v, invoices)
+			if err != nil {
+				return err
+			}
+
+			if invoice.State != invpkg.ContractCanceled {
+				return nil
+			}
+
+			// Delete the payment hash from the invoice index.
+			err = invoiceIndex.Delete(k)
+			if err != nil {
+				return err
+			}
+
+			// Delete payment address index reference if there's a
+			// valid payment address.
+			if invoice.Terms.PaymentAddr != invpkg.BlankPayAddr {
+				// To ensure consistency check that the already
+				// fetched invoice key matches the one in the
+				// payment address index.
+				key := payAddrIndex.Get(
+					invoice.Terms.PaymentAddr[:],
+				)
+				if bytes.Equal(key, k) {
+					// Delete from the payment address
+					// index.
+					if err := payAddrIndex.Delete(
+						invoice.Terms.PaymentAddr[:],
+					); err != nil {
+						return err
+					}
+				}
+			}
+
+			// Remove from the add index.
+			var addIndexKey [8]byte
+			byteOrder.PutUint64(addIndexKey[:], invoice.AddIndex)
+			err = invoiceAddIndex.Delete(addIndexKey[:])
+			if err != nil {
+				return err
+			}
+
+			// Note that we don't need to delete the invoice from
+			// the settle index as it is not added until the
+			// invoice is settled.
+
+			// Now remove all sub invoices.
+			err = delAMPInvoices(k, invoices)
+			if err != nil {
+				return err
+			}
+
+			// Finally remove the serialized invoice from the
+			// invoice bucket.
+			return invoices.Delete(k)
+		})
+	}, func() {})
+}
+
 // DeleteInvoice attempts to delete the passed invoices from the database in
 // one transaction. The passed delete references hold all keys required to
 // delete the invoices without also needing to deserialze them.
diff --git a/invoices/interface.go b/invoices/interface.go
index d88a96753..7bb39f846 100644
--- a/invoices/interface.go
+++ b/invoices/interface.go
@@ -95,6 +95,10 @@ type InvoiceDB interface {
 	// deserialze them.
 	DeleteInvoice(ctx context.Context,
 		invoicesToDelete []InvoiceDeleteRef) error
+
+	// DeleteCanceledInvoices removes all canceled invoices from the
+	// database.
+	DeleteCanceledInvoices(ctx context.Context) error
 }
 
 // Payload abstracts access to any additional fields provided in the final hop's
diff --git a/invoices/mock.go b/invoices/mock.go
index 5c419d0b1..f7f6a0bc2 100644
--- a/invoices/mock.go
+++ b/invoices/mock.go
@@ -85,3 +85,9 @@ func (m *MockInvoiceDB) DeleteInvoice(invoices []InvoiceDeleteRef) error {
 
 	return args.Error(0)
 }
+
+func (m *MockInvoiceDB) DeleteCanceledInvoices(ctx context.Context) error {
+	args := m.Called(ctx)
+
+	return args.Error(0)
+}