diff --git a/config.go b/config.go
index 3fe0059f..840f2765 100644
--- a/config.go
+++ b/config.go
@@ -248,6 +248,8 @@ type Config struct {
 
 	AllowCircularRoute bool `long:"allow-circular-route" description:"If true, our node will allow htlc forwards that arrive and depart on the same channel."`
 
+	DB *lncfg.DB `group:"db" namespace:"db"`
+
 	// registeredChains keeps track of all chains that have been registered
 	// with the daemon.
 	registeredChains *chainRegistry
@@ -358,6 +360,7 @@ func DefaultConfig() Config {
 		},
 		MaxOutgoingCltvExpiry:   htlcswitch.DefaultMaxOutgoingCltvExpiry,
 		MaxChannelFeeAllocation: htlcswitch.DefaultMaxLinkFeeAllocation,
+		DB:                      lncfg.DefaultDB(),
 		registeredChains:        newChainRegistry(),
 	}
 }
@@ -1073,6 +1076,7 @@ func ValidateConfig(cfg Config, usageMessage string) (*Config, error) {
 		cfg.Workers,
 		cfg.Caches,
 		cfg.WtClient,
+		cfg.DB,
 	)
 	if err != nil {
 		return nil, err
@@ -1090,6 +1094,14 @@ func ValidateConfig(cfg Config, usageMessage string) (*Config, error) {
 	return &cfg, err
 }
 
+// localDatabaseDir returns the default directory where the
+// local bolt db files are stored.
+func (c *config) localDatabaseDir() string {
+	return filepath.Join(cfg.DataDir,
+		defaultGraphSubDirname,
+		normalizeNetwork(activeNetParams.Name))
+}
+
 // CleanAndExpandPath expands environment variables and leading ~ in the
 // passed path, cleans the result, and returns it.
 // This function is taken from https://github.com/btcsuite/btcd
diff --git a/lncfg/db.go b/lncfg/db.go
new file mode 100644
index 00000000..4b887aa1
--- /dev/null
+++ b/lncfg/db.go
@@ -0,0 +1,85 @@
+package lncfg
+
+import (
+	"fmt"
+
+	"github.com/lightningnetwork/lnd/channeldb/kvdb"
+	"github.com/lightningnetwork/lnd/channeldb/kvdb/etcd"
+)
+
+const (
+	dbName      = "channel.db"
+	boltBackend = "bolt"
+	etcdBackend = "etcd"
+)
+
+// BoltDB holds bolt configuration.
+type BoltDB struct {
+	NoFreeListSync bool `long:"nofreelistsync" description:"If true, prevents the database from syncing its freelist to disk"`
+}
+
+// EtcdDB hold etcd configuration.
+type EtcdDB struct {
+	Host string `long:"host" description:"Etcd database host."`
+
+	User string `long:"user" description:"Etcd database user."`
+
+	Pass string `long:"pass" description:"Password for the database user."`
+
+	CollectStats bool `long:"collect_stats" description:"Wheter to collect etcd commit stats."`
+}
+
+// DB holds database configuration for LND.
+type DB struct {
+	Backend string `long:"backend" description:"The selected database backend."`
+
+	Etcd *EtcdDB `group:"etcd" namespace:"etcd" description:"Etcd settings."`
+
+	Bolt *BoltDB `group:"bolt" namespace:"bolt" description:"Bolt settings."`
+}
+
+// NewDB creates and returns a new default DB config.
+func DefaultDB() *DB {
+	return &DB{
+		Backend: boltBackend,
+		Bolt: &BoltDB{
+			NoFreeListSync: true,
+		},
+	}
+}
+
+// Validate validates the DB config.
+func (db *DB) Validate() error {
+	switch db.Backend {
+	case boltBackend:
+
+	case etcdBackend:
+		if db.Etcd.Host == "" {
+			return fmt.Errorf("etcd host must be set")
+		}
+
+	default:
+		return fmt.Errorf("unknown backend, must be either \"%v\" or \"%v\"",
+			boltBackend, etcdBackend)
+	}
+
+	return nil
+}
+
+// GetBackend returns a kvdb.Backend as set in the DB config.
+func (db *DB) GetBackend(path string) (kvdb.Backend, error) {
+	if db.Backend == etcdBackend {
+		backendConfig := etcd.BackendConfig{
+			Host:               db.Etcd.Host,
+			User:               db.Etcd.User,
+			Pass:               db.Etcd.Pass,
+			CollectCommitStats: db.Etcd.CollectStats,
+		}
+		return kvdb.Open(kvdb.EtcdBackendName, backendConfig)
+	}
+
+	return kvdb.GetBoltBackend(path, dbName, db.Bolt.NoFreeListSync)
+}
+
+// Compile-time constraint to ensure Workers implements the Validator interface.
+var _ Validator = (*DB)(nil)
diff --git a/lnd.go b/lnd.go
index 578f6845..125990a2 100644
--- a/lnd.go
+++ b/lnd.go
@@ -247,10 +247,6 @@ func Main(cfg *Config, lisCfg ListenerCfg, shutdownChan <-chan struct{}) error {
 	}
 
 	// Create the network-segmented directory for the channel database.
-	graphDir := filepath.Join(cfg.DataDir,
-		defaultGraphSubDirname,
-		normalizeNetwork(activeNetParams.Name))
-
 	ltndLog.Infof("Opening the main database, this might take a few " +
 		"minutes...")
 
@@ -258,7 +254,7 @@ func Main(cfg *Config, lisCfg ListenerCfg, shutdownChan <-chan struct{}) error {
 	// network related metadata.
 	startOpenTime := time.Now()
 	chanDB, err := channeldb.Open(
-		graphDir,
+		cfg.localDatabaseDir(),
 		channeldb.OptionSetRejectCacheSize(cfg.Caches.RejectCacheSize),
 		channeldb.OptionSetChannelCacheSize(cfg.Caches.ChannelCacheSize),
 		channeldb.OptionSetSyncFreelist(cfg.SyncFreelist),
@@ -493,7 +489,7 @@ func Main(cfg *Config, lisCfg ListenerCfg, shutdownChan <-chan struct{}) error {
 	var towerClientDB *wtdb.ClientDB
 	if cfg.WtClient.Active {
 		var err error
-		towerClientDB, err = wtdb.OpenClientDB(graphDir)
+		towerClientDB, err = wtdb.OpenClientDB(cfg.localDatabaseDir())
 		if err != nil {
 			err := fmt.Errorf("unable to open watchtower client "+
 				"database: %v", err)