diff --git a/clippy.toml b/clippy.toml
index bb74a2cd9..2fbcb11b9 100644
--- a/clippy.toml
+++ b/clippy.toml
@@ -2,6 +2,7 @@ disallowed-methods = [
     { path = "rand::thread_rng", reason = "Do not use rand::* directly. Instead, use functions from random.rs" },
     # We still have `std::fs` references.
     # { path = "std::fs", reason = "Do not use std::fs directly. Instead, use the FileStorageProvider." },
+    { path = "vfs::PhysicalFS::new", reason = "Do not use vfs::PhysicalFS in tests. Instead, use the VirtualStorageProvider::new_overlay()." },
     # Disallowed methods for the rayon crate to enforce execution within a specified thread pool instead of the global thread pool.
     { path = "rayon::iter::ParallelIterator::for_each", reason = "Use `for_each_in_pool` from rayon_utils.rs instead to enforce execution within a specified thread pool."},
     { path = "rayon::iter::ParallelIterator::for_each_with", reason = "Use `for_each_with_in_pool` instead to enforce execution within a specified thread pool."},
diff --git a/diskann-disk/src/storage/quant/pq/pq_generation.rs b/diskann-disk/src/storage/quant/pq/pq_generation.rs
index 63a8ce77f..1ea3a30af 100644
--- a/diskann-disk/src/storage/quant/pq/pq_generation.rs
+++ b/diskann-disk/src/storage/quant/pq/pq_generation.rs
@@ -194,7 +194,7 @@ mod pq_generation_tests {
     use diskann_utils::views::{MatrixView, MutMatrixView};
     use diskann_vector::distance::Metric;
     use rstest::rstest;
-    use vfs::{FileSystem, MemoryFS, OverlayFS, PhysicalFS};
+    use vfs::{FileSystem, MemoryFS, OverlayFS};
 
     use super::{CompressionStage, PQGeneration, PQGenerationContext};
     use crate::storage::quant::compressor::QuantCompressor;
@@ -361,10 +361,7 @@ mod pq_generation_tests {
 
     #[rstest]
     fn test_pq_end_to_end_with_codebook() {
-        let storage_provider = VirtualStorageProvider::new(OverlayFS::new(&[
-            MemoryFS::default().into(),
-            PhysicalFS::new(test_data_root()).into(),
-        ]));
+        let storage_provider = VirtualStorageProvider::new_overlay(test_data_root());
 
         let pool = create_thread_pool_for_test();
         let dim = 128;
@@ -415,10 +412,7 @@ mod pq_generation_tests {
         #[case] centers: usize,
     ) {
         //test the error cases for parameters: num_chunks > dim, num_chunks == 0, num_centers == 0
-        let storage_provider = VirtualStorageProvider::new(OverlayFS::new(&[
-            MemoryFS::default().into(),
-            PhysicalFS::new("tests/data/").into(),
-        ]));
+        let storage_provider = VirtualStorageProvider::new_overlay(test_data_root());
         let pool = create_thread_pool_for_test();
         let max_k_means_reps = 10;
         let compressor = create_new_compressor(
diff --git a/diskann-disk/src/utils/aligned_file_reader/storage_provider_aligned_file_reader.rs b/diskann-disk/src/utils/aligned_file_reader/storage_provider_aligned_file_reader.rs
index 1b9a33ff6..2e0b88253 100644
--- a/diskann-disk/src/utils/aligned_file_reader/storage_provider_aligned_file_reader.rs
+++ b/diskann-disk/src/utils/aligned_file_reader/storage_provider_aligned_file_reader.rs
@@ -48,27 +48,21 @@ impl AlignedFileReader for StorageProviderAlignedFileReader {
 
 #[cfg(test)]
 mod tests {
-    use std::{
-        fs::File,
-        io::{Seek, SeekFrom},
-    };
+    use std::io::{Seek, SeekFrom};
 
     use diskann_providers::storage::VirtualStorageProvider;
     use diskann_utils::test_data_root;
-    use vfs::PhysicalFS;
 
     use super::*;
     use diskann_providers::common::AlignedBoxWithSlice;
 
     fn test_index_path() -> String {
-        test_data_root()
-            .join("disk_index_misc/disk_index_siftsmall_learn_256pts_R4_L50_A1.2_aligned_reader_test.index")
-            .to_string_lossy()
+        "/disk_index_misc/disk_index_siftsmall_learn_256pts_R4_L50_A1.2_aligned_reader_test.index"
             .to_string()
     }
 
     fn setup_reader() -> StorageProviderAlignedFileReader {
-        let storage_provider = VirtualStorageProvider::new(PhysicalFS::new("/"));
+        let storage_provider = VirtualStorageProvider::new_overlay(test_data_root());
         StorageProviderAlignedFileReader::new(&storage_provider, &test_index_path()).unwrap()
     }
 
@@ -104,7 +98,8 @@ mod tests {
         assert!(result.is_ok());
 
         // Assert that the actual data is correct.
-        let mut file = File::open(test_index_path()).unwrap();
+        let file_system = VirtualStorageProvider::new_overlay(test_data_root());
+        let mut file = file_system.open_reader(&test_index_path()).unwrap();
         for current_read in aligned_reads {
             let offset = current_read.offset();
             let mut expected = vec![0; current_read.aligned_buf().len()];
diff --git a/diskann-disk/src/utils/partition.rs b/diskann-disk/src/utils/partition.rs
index 04bc8e8ae..67a88ef54 100644
--- a/diskann-disk/src/utils/partition.rs
+++ b/diskann-disk/src/utils/partition.rs
@@ -428,7 +428,7 @@ mod partition_test {
     use diskann_providers::storage::VirtualStorageProvider;
     use diskann_providers::utils::create_thread_pool_for_test;
     use diskann_utils::test_data_root;
-    use vfs::{MemoryFS, OverlayFS, PhysicalFS};
+    use vfs::{MemoryFS, OverlayFS};
 
     use super::*;
 
@@ -468,10 +468,7 @@ mod partition_test {
         let num_points: u32 = 100;
         let dim: usize = 10;
 
-        let base_filesystem = PhysicalFS::new(test_data_root());
-        let memory_filesystem = MemoryFS::new();
-        let vfs = OverlayFS::new(&[memory_filesystem.into(), base_filesystem.into()]);
-        let storage_provider = VirtualStorageProvider::new(vfs);
+        let storage_provider = VirtualStorageProvider::new_overlay(test_data_root());
         {
             let writer = storage_provider.create_for_write(dataset_path).unwrap();
             let mut dataset_writer = CachedWriter::<VirtualStorageProvider<MemoryFS>>::new(
@@ -556,10 +553,7 @@ mod partition_test {
 
     #[test]
     fn test_partition_with_ram_budget() -> ANNResult<()> {
-        let base_filesystem = PhysicalFS::new(test_data_root());
-        let memory_filesystem = MemoryFS::new();
-        let vfs = OverlayFS::new(&[memory_filesystem.into(), base_filesystem.into()]);
-        let storage_provider = VirtualStorageProvider::new(vfs);
+        let storage_provider = VirtualStorageProvider::new_overlay(test_data_root());
         let dataset_file = "/sift/siftsmall_learn.bin";
         let mut file = storage_provider.open_reader(dataset_file).unwrap();
         let mut data = vec![];
diff --git a/diskann-providers/benches/benchmarks/copy_aligned_data_bench.rs b/diskann-providers/benches/benchmarks/copy_aligned_data_bench.rs
index 82eba85a8..893f7cd2d 100644
--- a/diskann-providers/benches/benchmarks/copy_aligned_data_bench.rs
+++ b/diskann-providers/benches/benchmarks/copy_aligned_data_bench.rs
@@ -22,6 +22,7 @@ pub const BENCHMARK_ID: &str = "copy_aligned_data";
 pub fn benchmark_copy_aligned_data(c: &mut Criterion) {
     let tmp_dir = TempDir::with_prefix(BENCHMARK_ID).expect("Failed to create temporary directory");
     // Use physical file system rather than memory for testing the actual disk read/write
+    #[allow(clippy::disallowed_methods)]
     let storage_provider = VirtualStorageProvider::new(PhysicalFS::new(tmp_dir.path()));
 
     let num_points = 1_000_000;
diff --git a/diskann-providers/benches/benchmarks_iai/copy_aligned_data_bench_iai.rs b/diskann-providers/benches/benchmarks_iai/copy_aligned_data_bench_iai.rs
index 93df93f07..31406e379 100644
--- a/diskann-providers/benches/benchmarks_iai/copy_aligned_data_bench_iai.rs
+++ b/diskann-providers/benches/benchmarks_iai/copy_aligned_data_bench_iai.rs
@@ -28,6 +28,7 @@ iai_callgrind::library_benchmark_group!(
 pub fn benchmark_copy_aligned_data_iai() {
     let tmp_dir = TempDir::with_prefix(BENCHMARK_ID).expect("Failed to create temporary directory");
     // Use physical file system rather than memory for testing the actual disk read/write
+    #[allow(clippy::disallowed_methods)]
     let storage_provider = VirtualStorageProvider::new(PhysicalFS::new(tmp_dir.path()));
 
     let num_points = 1_000_000;
diff --git a/diskann-providers/src/model/pq/fixed_chunk_pq_table.rs b/diskann-providers/src/model/pq/fixed_chunk_pq_table.rs
index cf5521470..7939bb93f 100644
--- a/diskann-providers/src/model/pq/fixed_chunk_pq_table.rs
+++ b/diskann-providers/src/model/pq/fixed_chunk_pq_table.rs
@@ -768,7 +768,6 @@ mod fixed_chunk_pq_table_test {
         distance::{InnerProduct, SquaredL2},
     };
     use itertools::iproduct;
-    use vfs::PhysicalFS;
 
     use super::*;
     use crate::{
@@ -945,9 +944,8 @@ mod fixed_chunk_pq_table_test {
             .parent()
             .unwrap()
             .to_path_buf();
-        let vfs = PhysicalFS::new(workspace_root);
-        let storage_provider = VirtualStorageProvider::new(vfs);
-        let pq_pivots_path: &str = "test_data/sift/siftsmall_learn_pq_pivots.bin";
+        let storage_provider = VirtualStorageProvider::new_overlay(workspace_root);
+        let pq_pivots_path: &str = "/test_data/sift/siftsmall_learn_pq_pivots.bin";
         let (dim, pq_table, centroids, chunk_offsets) =
             load_pq_pivots_bin(pq_pivots_path, &1, &storage_provider).unwrap();
         let fixed_chunk_pq_table = FixedChunkPQTable::new(
@@ -1021,10 +1019,9 @@ mod fixed_chunk_pq_table_test {
             .parent()
             .unwrap()
             .to_path_buf();
-        let vfs = PhysicalFS::new(workspace_root);
-        let storage_provider = VirtualStorageProvider::new(vfs);
+        let storage_provider = VirtualStorageProvider::new_overlay(workspace_root);
 
-        let pq_pivots_path: &str = "test_data/sift/siftsmall_learn_pq_pivots.bin";
+        let pq_pivots_path: &str = "/test_data/sift/siftsmall_learn_pq_pivots.bin";
         let (dim, pq_table, centroids, chunk_offsets) =
             load_pq_pivots_bin(pq_pivots_path, &1, &storage_provider).unwrap();
         let fixed_chunk_pq_table = FixedChunkPQTable::new(
@@ -1121,10 +1118,9 @@ mod fixed_chunk_pq_table_test {
             .parent()
             .unwrap()
             .to_path_buf();
-        let vfs = PhysicalFS::new(workspace_root);
-        let storage_provider = VirtualStorageProvider::new(vfs);
+        let storage_provider = VirtualStorageProvider::new_overlay(workspace_root);
 
-        let pq_pivots_path: &str = "test_data/sift/siftsmall_learn_pq_pivots.bin";
+        let pq_pivots_path: &str = "/test_data/sift/siftsmall_learn_pq_pivots.bin";
 
         let (dim, pq_table, centroids, chunk_offsets) =
             load_pq_pivots_bin(pq_pivots_path, &1, &storage_provider).unwrap();
diff --git a/diskann-providers/src/model/pq/pq_construction.rs b/diskann-providers/src/model/pq/pq_construction.rs
index 609670fc8..cbaf478e6 100644
--- a/diskann-providers/src/model/pq/pq_construction.rs
+++ b/diskann-providers/src/model/pq/pq_construction.rs
@@ -1009,7 +1009,7 @@ mod pq_test {
     use diskann::utils::IntoUsize;
     use rand_distr::{Distribution, Uniform};
     use rstest::rstest;
-    use vfs::{MemoryFS, OverlayFS, PhysicalFS};
+    use vfs::{MemoryFS, OverlayFS};
 
     use super::*;
     use crate::{
@@ -1248,10 +1248,7 @@ mod pq_test {
             .parent()
             .unwrap()
             .to_path_buf();
-        let storage_provider = VirtualStorageProvider::new(OverlayFS::new(&[
-            MemoryFS::default().into(),
-            PhysicalFS::new(workspace_root).into(),
-        ]));
+        let storage_provider = VirtualStorageProvider::new_overlay(workspace_root);
         let pq_storage = PQStorage::new(PQ_PIVOT_PATH, PQ_COMPRESSED_PATH, Some(DATA_FILE));
         let pool = create_thread_pool_for_test();
         let result = generate_pq_pivots(
@@ -1435,10 +1432,7 @@ mod pq_test {
             .parent()
             .unwrap()
             .to_path_buf();
-        let storage_provider = VirtualStorageProvider::new(OverlayFS::new(&[
-            MemoryFS::default().into(),
-            PhysicalFS::new(workspace_root).into(),
-        ]));
+        let storage_provider = VirtualStorageProvider::new_overlay(workspace_root);
 
         let data_file = "/test_data/sift/siftsmall_learn.bin";
         let pq_pivots_path = "/pq_pivots_validation.bin";
@@ -1689,10 +1683,7 @@ mod pq_test {
             .parent()
             .unwrap()
             .to_path_buf();
-        let storage_provider = VirtualStorageProvider::new(OverlayFS::new(&[
-            MemoryFS::default().into(),
-            PhysicalFS::new(workspace_root).into(),
-        ]));
+        let storage_provider = VirtualStorageProvider::new_overlay(workspace_root);
         type ReaderType = <VirtualStorageProvider<OverlayFS> as StorageReadProvider>::Reader;
 
         let data_file = "/test_data/sift/siftsmall_learn.bin";
@@ -1798,10 +1789,7 @@ mod pq_test {
             .parent()
             .unwrap()
             .to_path_buf();
-        let storage_provider = VirtualStorageProvider::new(OverlayFS::new(&[
-            MemoryFS::default().into(),
-            PhysicalFS::new(workspace_root).into(),
-        ]));
+        let storage_provider = VirtualStorageProvider::new_overlay(workspace_root);
 
         let data_file = "/test_data/sift/siftsmall_learn.bin";
         let pq_pivots_path = "/pq_pivots_validation.bin";
diff --git a/diskann-providers/src/storage/pq_storage.rs b/diskann-providers/src/storage/pq_storage.rs
index 3f7b2e327..ddf12593b 100644
--- a/diskann-providers/src/storage/pq_storage.rs
+++ b/diskann-providers/src/storage/pq_storage.rs
@@ -436,7 +436,7 @@ impl PQStorage {
 mod pq_storage_tests {
 
     use crate::storage::VirtualStorageProvider;
-    use vfs::{MemoryFS, OverlayFS, PhysicalFS};
+    use vfs::MemoryFS;
 
     use super::*;
     use crate::utils::{gen_random_slice, read_metadata};
@@ -485,8 +485,7 @@ mod pq_storage_tests {
             .parent()
             .unwrap()
             .to_path_buf();
-        let filesystem = PhysicalFS::new(workspace_root);
-        let storage_provider = VirtualStorageProvider::new(filesystem);
+        let storage_provider = VirtualStorageProvider::new_overlay(workspace_root);
         let result = PQStorage::new(PQ_PIVOT_PATH, PQ_COMPRESSED_PATH, Some(DATA_FILE));
         assert!(result.pivot_data_exist(&storage_provider));
 
@@ -501,8 +500,7 @@ mod pq_storage_tests {
             .parent()
             .unwrap()
             .to_path_buf();
-        let filesystem = PhysicalFS::new(workspace_root);
-        let storage_provider = VirtualStorageProvider::new(filesystem);
+        let storage_provider = VirtualStorageProvider::new_overlay(workspace_root);
         let result = PQStorage::new(PQ_PIVOT_PATH, PQ_COMPRESSED_PATH, Some(DATA_FILE));
         let (npt, dim) = result
             .read_existing_pivot_metadata(&storage_provider)
@@ -518,8 +516,7 @@ mod pq_storage_tests {
             .parent()
             .unwrap()
             .to_path_buf();
-        let filesystem = PhysicalFS::new(workspace_root);
-        let storage_provider = VirtualStorageProvider::new(filesystem);
+        let storage_provider = VirtualStorageProvider::new_overlay(workspace_root);
         let result = PQStorage::new(PQ_PIVOT_PATH, PQ_COMPRESSED_PATH, Some(DATA_FILE));
         let (pq_pivot_data, centroids, chunk_offsets, _) = result
             .load_existing_pivot_data(&1, &256, &128, &storage_provider, false)
@@ -542,10 +539,7 @@ mod pq_storage_tests {
             .parent()
             .unwrap()
             .to_path_buf();
-        let base_filesystem = PhysicalFS::new(workspace_root);
-        let memory_filesystem = MemoryFS::new();
-        let vfs = OverlayFS::new(&[memory_filesystem.into(), base_filesystem.into()]);
-        let storage_provider = VirtualStorageProvider::new(vfs);
+        let storage_provider = VirtualStorageProvider::new_overlay(workspace_root);
         let pq_storage = PQStorage::new(PQ_PIVOT_PATH, PQ_COMPRESSED_PATH, Some(DATA_FILE));
 
         // Write OPQ test data
diff --git a/diskann-providers/src/storage/virtual_storage_provider.rs b/diskann-providers/src/storage/virtual_storage_provider.rs
index bf02fb05e..e591c0c15 100644
--- a/diskann-providers/src/storage/virtual_storage_provider.rs
+++ b/diskann-providers/src/storage/virtual_storage_provider.rs
@@ -167,6 +167,7 @@ impl VirtualStorageProvider<OverlayFS> {
     /// Create a two-layer overlay filesystem with an in-memory filesystem for writes
     /// on top of the physical filesystem for reads.
     pub fn new_overlay<P: AsRef<std::path::Path>>(path: P) -> Self {
+        #[allow(clippy::disallowed_methods)]
         let base_filesystem = PhysicalFS::new(path);
         let memory_filesystem = MemoryFS::new();
         let overlay_filesystem =
diff --git a/diskann-providers/src/utils/kmeans.rs b/diskann-providers/src/utils/kmeans.rs
index 50cbe0f11..034210f0b 100644
--- a/diskann-providers/src/utils/kmeans.rs
+++ b/diskann-providers/src/utils/kmeans.rs
@@ -723,10 +723,7 @@ mod kmeans_test {
             .parent()
             .unwrap()
             .to_path_buf();
-        let base_filesystem = PhysicalFS::new(workspace_root);
-        let memory_filesystem = MemoryFS::new();
-        let vfs = OverlayFS::new(&[memory_filesystem.into(), base_filesystem.into()]);
-        let storage_provider = VirtualStorageProvider::new(vfs);
+        let storage_provider = VirtualStorageProvider::new_overlay(workspace_root);
         let mut reader =
             std::io::BufReader::new(storage_provider.open_reader(test_data_path).unwrap());
         for _ in 0..256 {
@@ -949,7 +946,6 @@ mod kmeans_test {
     }
 
     use proptest::{prelude::*, test_runner::Config};
-    use vfs::{MemoryFS, OverlayFS, PhysicalFS};
 
     proptest! {
         #![proptest_config(Config {
diff --git a/diskann-providers/src/utils/normalizing_util.rs b/diskann-providers/src/utils/normalizing_util.rs
index f7c1e4340..517b18afc 100644
--- a/diskann-providers/src/utils/normalizing_util.rs
+++ b/diskann-providers/src/utils/normalizing_util.rs
@@ -139,7 +139,6 @@ pub fn normalize_data_internal<Pool: AsThreadPool>(
 #[cfg(test)]
 mod normalizing_utils_test {
     use crate::storage::{StorageReadProvider, VirtualStorageProvider};
-    use vfs::{MemoryFS, OverlayFS, PhysicalFS};
 
     use super::*;
     use crate::utils::{create_thread_pool_for_test, storage_utils::*};
@@ -154,10 +153,7 @@ mod normalizing_utils_test {
             .parent()
             .unwrap()
             .to_path_buf();
-        let base_filesystem = PhysicalFS::new(workspace_root);
-        let memory_filesystem = MemoryFS::new();
-        let vfs = OverlayFS::new(&[memory_filesystem.into(), base_filesystem.into()]);
-        let storage_provider = VirtualStorageProvider::new(vfs);
+        let storage_provider = VirtualStorageProvider::new_overlay(workspace_root);
         let pool = create_thread_pool_for_test();
         normalize_data_file(in_file_name, out_file_name, &storage_provider, &pool).unwrap();
 
diff --git a/diskann-tools/src/utils/relative_contrast.rs b/diskann-tools/src/utils/relative_contrast.rs
index 65a30fac7..41681cd17 100644
--- a/diskann-tools/src/utils/relative_contrast.rs
+++ b/diskann-tools/src/utils/relative_contrast.rs
@@ -109,7 +109,7 @@ mod relative_contrast_tests {
     use diskann_vector::distance::Metric;
     use half::f16;
     use rand::Rng;
-    use vfs::{MemoryFS, PhysicalFS};
+    use vfs::MemoryFS;
 
     use super::*;
     use crate::utils::{ground_truth::compute_ground_truth_from_datafiles, GraphDataHalfVector};
@@ -201,10 +201,9 @@ mod relative_contrast_tests {
     /// Expectation: relative contrast > 1.5
     #[test]
     fn test_compute_relative_contrast_with_sift_files() {
-        let filesystem = PhysicalFS::new(diskann_utils::test_data_root().join("sift"));
-
-        let storage_provider = VirtualStorageProvider::new(filesystem);
-        let base_file_path = "siftsmall_learn_256pts.fbin";
+        let storage_provider =
+            VirtualStorageProvider::new_overlay(diskann_utils::test_data_root().join("sift"));
+        let base_file_path = "/siftsmall_learn_256pts.fbin";
 
         assert!(
             storage_provider.exists(base_file_path),
@@ -218,7 +217,7 @@ mod relative_contrast_tests {
             .map(|_| f16::from_f32(rng.random_range(0.0..1.0)))
             .collect();
 
-        let query_file_path = "query.bin";
+        let query_file_path = "/query.bin";
 
         {
             let mut query_writer = storage_provider
@@ -233,7 +232,7 @@ mod relative_contrast_tests {
         }
 
         // Generate ground truth file using compute_ground_truth_from_datafiles
-        let gt_file_path = "ground_truth.bin";
+        let gt_file_path = "/ground_truth.bin";
         let recall_at = 3;
         compute_ground_truth_from_datafiles::<GraphDataHalfVector, _>(
             &storage_provider,