A method for on-demand management of Internet Protocol (IP) address pools includes allocating an unused IP address from a local IP address pool designated for a remote domain if a request to connect to the remote domain is received and deallocating an IP address back to the local IP address pool if the IP address is unused. The method also includes apportioning one or more of the at least one subnet between the global IP address pool and the local IP address pool based upon utilization of the local IP address pool. The local IP address pool includes one or more of at least one subnet obtained from a global IP address pool and each subnet specifies a contiguous set of one or more IP addresses.