Finally was able to resolve the issue. It seems the sshd.service did not line Type=forking.
I changed it to Type=simple and it started working. So now my sshd.service file looks like this: [Unit] Description=OpenSSH server daemon Documentation=man:sshd(8) man:sshd_config(5) After=network.target sshdkeygen.service Wants=sshdkeygen.service [Service] Type=simple PIDFile=/run/sshd.pid EnvironmentFile=-@SYSCONFDIR@/default/sshd ExecStart=@SBINDIR@/sshd -D $OPTIONS ExecReload=@BASE_BINDIR@/kill -HUP $MAINPID PermissionsStartOnly=true ExecStartPre=-/bin/mkdir -p /var/run/sshd ExecStartPre=/bin/chmod -R 755 /var/run/sshd KillMode=process Restart=on-failure RestartSec=42s [Install] WantedBy=multi-user.target Thanks, -=Srijan Nandi
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