Reduce KVM disk size with dd and sparsify

You can convert a raw or qcow2 non-sparse image to a sparse image with dd and sparsify. Or you can reduce the size of an existing image again.

Install the libguestfs-tools on your system

apt-get install libguestfs-tools

Now copy your existing image to a new one with dd

dd if=existing_imagefile.raw of=new_imagefile.raw conv=sparse

Afterwards use virt-sparsify to reduce your disk size again (in this example I sparsed and converted the image in just one step)

virt-sparsify new_imagefile.raw --convert qcow2 new_imagefile.qcow2

In my case I converted a block device with 65GB with dd sparse to 40GB raw image and afterwards I used virt-sparsify to reduce the size down to 6.8GB.