I’m running into the issues while creating the container, I’m using ubuntu 16.04 OS, docker 1.12.1, flannel 0.5.5, and etcd datastore.

sudo systemctl status kubelet.service
● kubelet.service - Kubernetes Kubelet Server
Loaded: loaded (/lib/systemd/system/kubelet.service; enabled; vendor preset: enabled)
Active: active (running) since Mon 2016-09-12 14:23:02 EDT; 3h 6min ago
Docs: https://github.com/GoogleCloudPlatform/kubernetes
Main PID: 15788 (kubelet)
Tasks: 9
Memory: 848.0K
CPU: 815ms
CGroup: /system.slice/kubelet.service
Sep 12 17:19:40 vm3-VirtualBox kubelet[15788]: W0912 17:19:40.585677 15788 container_manager_linux.go:278] [ContainerManager] Failed to ensure state of "/docke
Sep 12 17:20:40 vm3-VirtualBox kubelet[15788]: W0912 17:20:40.615756 15788 container_manager_linux.go:278] [ContainerManager] Failed to ensure state of "/docke
Sep 12 17:21:40 vm3-VirtualBox kubelet[15788]: W0912 17:21:40.624172 15788 
Sep 12 17:23:40 vm3-VirtualBox kubelet[15788]: W0912 17:23:40.657396 15788 container_manager_linux.go:278] [ContainerManager] Failed to ensure state of "/docker
belet[15788]: W0912 16:47:40.051784 15788 container_manager_linux.go:278] [ContainerManager] Failed to ensure state of "/docke
Sep 12 16:48:06 vm3-VirtualBox sudo[19448]: pam_unix(sudo:session): session closed for user root
Sep 12 16:48:40 vm3-VirtualBox kubelet[15788]: W0912 16:48:40.073855 15788 container_manager_linux.go:278] [ContainerManager] Failed to ensure state of "/docke

Master node

kubectl describe pods my-first-nginx-a9bgy

Replication Controllers:    my-first-nginx (1/1 replicas created)
Containers:
  my-first-nginx:
    Container ID:    
    Image:        nginx
    Image ID:        
    State:        Waiting
      Reason:        ContainerCreating

  1m        1m        1    {kubelet    implicitly required container POD    Created        Created with docker id 9fc5d67d3921
  1m        1m        1    {kubelet    implicitly required container POD    Failed        Failed to start with docker id 9fc5d67d3921 with error: API error (400): {"message":"starting container with HostConfig was deprecated since v1.10 and removed in v1.12"}
{kubelet }    implicitly required container POD    Created        Created with docker id f55e2b6538b5
  1m    6s    10    {kubelet                         FailedSync    Error syncing pod, skipping: API error (400): {"messag
 "starting container with HostConfig was deprecated since v1.10 and removed in v1.12"}

Do I need to make any changes in the /lib/systemd/system/docker.service or in /etc/default/docker. Is there any work around, I've read in few posts that kubernetes has some problem with the latest docker version.

Any help and suggestion on this will be really appreciated.