diff --git a/rusk/src/lib/chain/rusk.rs b/rusk/src/lib/chain/rusk.rs
index 9fbf7f1ab7..9361ecbf09 100644
--- a/rusk/src/lib/chain/rusk.rs
+++ b/rusk/src/lib/chain/rusk.rs
@@ -19,6 +19,7 @@ use dusk_consensus::operations::{
     CallParams, VerificationOutput, VoterWithCredits,
 };
 use execution_core::bytecode::Bytecode;
+use execution_core::transfer::ContractDeploy;
 use execution_core::{
     stake::StakeData, transfer::Transaction as PhoenixTransaction, BlsScalar,
     StakePublicKey,
@@ -505,22 +506,87 @@ fn bytecode_charge(
         * gas_per_deploy_byte.unwrap_or(DEFAULT_GAS_PER_DEPLOY_BYTE)
 }
 
+// Contract deployment will fail and charge full gas limit in the
+// following cases:
+// 1) Transaction gas limit is smaller than deploy charge plus gas used for
+//    spending funds.
+// 2) Transaction's bytecode's bytes are not consistent with bytecode's hash.
+// 3) Deployment fails for deploy-specific reasons like e.g.:
+//      - contract already deployed
+//      - corrupted bytecode
+//      - sufficient gas to spend funds yet insufficient for deployment
+fn contract_deploy(
+    session: &mut Session,
+    deploy: &ContractDeploy,
+    gas_limit: u64,
+    gas_per_deploy_byte: Option<u64>,
+    receipt: &mut CallReceipt<Result<Vec<u8>, ContractError>>,
+) {
+    let deploy_charge = bytecode_charge(&deploy.bytecode, &gas_per_deploy_byte);
+    let min_gas_limit = receipt.gas_spent + deploy_charge;
+    let hash = blake3::hash(deploy.bytecode.bytes.as_slice());
+    if gas_limit < min_gas_limit {
+        receipt.data = Err(OutOfGas);
+    } else if hash != deploy.bytecode.hash {
+        receipt.data = Err(Panic("failed bytecode hash check".into()))
+    } else {
+        let result = session.deploy_raw(
+            None,
+            deploy.bytecode.bytes.as_slice(),
+            deploy.constructor_args.clone(),
+            deploy.owner.clone(),
+            gas_limit - receipt.gas_spent,
+        );
+        match result {
+            Ok(_) => receipt.gas_spent += deploy_charge,
+            Err(err) => {
+                info!("Tx caused deployment error {err:?}");
+                receipt.data = Err(Panic("failed deployment".into()))
+            }
+        }
+    }
+}
+
 /// Executes a transaction, returning the receipt of the call and the gas spent.
 /// The following steps are performed:
 ///
-/// 1. Call the "spend_and_execute" function on the transfer contract with
+/// 1. Check if the transaction contains contract deployment data, and if so,
+///    verifies if gas limit is enough for deployment. If gas limit is not
+///    sufficient for deployment, transaction is discarded.
+///
+/// 2. Call the "spend_and_execute" function on the transfer contract with
 ///    unlimited gas. If this fails, an error is returned. If an error is
 ///    returned the transaction should be considered unspendable/invalid, but no
 ///    re-execution of previous transactions is required.
 ///
-/// 2. Call the "refund" function on the transfer contract with unlimited gas.
+/// 3. If the transaction contains contract deployment data, additional checks
+///    are performed and if they pass, deployment is executed. The following
+///    checks are performed:
+///    - gas limit should be is smaller than deploy charge plus gas used for
+///      spending funds
+///    - transaction's bytecode's bytes are consistent with bytecode's hash
+///    Deployment execution may fail for deployment-specific reasons, such as
+///    for example:
+///    - contract already deployed
+///    - corrupted bytecode
+///    If deployment execution fails, the entire gas limit is consumed and error
+///    is returned.
+///
+/// 4. Call the "refund" function on the transfer contract with unlimited gas.
 ///    The amount charged depends on the gas spent by the transaction, and the
-///    optional contract call in step 1.
+///    optional contract call in steps 2 or 3.
+///
+/// Note that deployment transaction will never be re-executed for reasons
+/// related to deployment, as it is either discarded or it charges the
+/// full gas limit. It might be re-executed only if some other transaction
+/// failed to fit the block.
 fn execute(
     session: &mut Session,
     tx: &PhoenixTransaction,
     gas_per_deploy_byte: Option<u64>,
 ) -> Result<CallReceipt<Result<Vec<u8>, ContractError>>, PiecrustError> {
+    // Transaction will be discarded if it is a deployment transaction
+    // with gas limit smaller than deploy charge.
     if let Some(deploy) = tx.payload().contract_deploy() {
         let deploy_charge =
             bytecode_charge(&deploy.bytecode, &gas_per_deploy_byte);
@@ -541,35 +607,16 @@ fn execute(
         tx.payload().fee.gas_limit,
     )?;
 
-    // Deploy if this is a deployment transaction
+    // Deploy if this is a deployment transaction and spend part is successful.
     if let Some(deploy) = tx.payload().contract_deploy() {
         if receipt.data.is_ok() {
-            let deploy_charge =
-                bytecode_charge(&deploy.bytecode, &gas_per_deploy_byte);
-            let min_gas_limit = receipt.gas_spent + deploy_charge;
-            let hash = blake3::hash(deploy.bytecode.bytes.as_slice());
-            if tx.payload().fee.gas_limit < min_gas_limit {
-                receipt.data = Err(OutOfGas);
-            } else if hash != deploy.bytecode.hash {
-                receipt.data = Err(Panic("failed bytecode hash check".into()))
-            } else {
-                let result = session.deploy_raw(
-                    None,
-                    deploy.bytecode.bytes.as_slice(),
-                    deploy.constructor_args.clone(),
-                    deploy.owner.clone(),
-                    tx.payload().fee.gas_limit - receipt.gas_spent,
-                );
-                match result {
-                    Ok(_) => {
-                        receipt.gas_spent += deploy_charge;
-                    }
-                    Err(err) => {
-                        info!("Tx caused deployment error {err:?}");
-                        receipt.data = Err(Panic("failed deployment".into()))
-                    }
-                }
-            }
+            contract_deploy(
+                session,
+                deploy,
+                tx.payload().fee.gas_limit,
+                gas_per_deploy_byte,
+                &mut receipt,
+            );
         }
     };