diff --git a/src/Magento/FunctionalTestingFramework/StaticCheck/ActionGroupArgumentsCheck.php b/src/Magento/FunctionalTestingFramework/StaticCheck/ActionGroupArgumentsCheck.php
index 881ee69ab..e6afded68 100644
--- a/src/Magento/FunctionalTestingFramework/StaticCheck/ActionGroupArgumentsCheck.php
+++ b/src/Magento/FunctionalTestingFramework/StaticCheck/ActionGroupArgumentsCheck.php
@@ -12,6 +12,8 @@
 use Symfony\Component\Finder\Finder;
 use Exception;
 use Magento\FunctionalTestingFramework\Util\Script\ScriptUtil;
+use Symfony\Component\Finder\SplFileInfo;
+use DOMElement;
 
 /**
  * Class ActionGroupArgumentsCheck
@@ -19,10 +21,7 @@
  */
 class ActionGroupArgumentsCheck implements StaticCheckInterface
 {
-    const ACTIONGROUP_XML_REGEX_PATTERN = '/<actionGroup\sname=(?: (?!<\/actionGroup>).)*/mxs';
-    const ACTIONGROUP_ARGUMENT_REGEX_PATTERN = '/<argument[^\/>]*name="([^"\']*)/mxs';
     const ACTIONGROUP_NAME_REGEX_PATTERN = '/<actionGroup name=["\']([^\'"]*)/';
-
     const ERROR_LOG_FILENAME = 'mftf-arguments-checks';
     const ERROR_LOG_MESSAGE = 'MFTF Action Group Unused Arguments Check';
 
@@ -97,45 +96,62 @@ public function getOutput()
     private function findErrorsInFileSet($files)
     {
         $actionGroupErrors = [];
+        /** @var SplFileInfo $filePath */
         foreach ($files as $filePath) {
-            $contents = file_get_contents($filePath);
-            preg_match_all(self::ACTIONGROUP_XML_REGEX_PATTERN, $contents, $actionGroups);
-            $actionGroupToArguments = $this->buildUnusedArgumentList($actionGroups[0]);
-            $actionGroupErrors += $this->setErrorOutput($actionGroupToArguments, $filePath);
+            $actionGroupToArguments = [];
+            $contents = $filePath->getContents();
+            /** @var DOMElement $actionGroup */
+            $actionGroup = $this->getActionGroupDomElement($contents);
+            $arguments = $this->extractActionGroupArguments($actionGroup);
+            $unusedArguments = $this->findUnusedArguments($arguments, $contents);
+            if (!empty($unusedArguments)) {
+                $actionGroupToArguments[$actionGroup->getAttribute('name')] = $unusedArguments;
+                $actionGroupErrors += $this->setErrorOutput($actionGroupToArguments, $filePath);
+            }
         }
         return $actionGroupErrors;
     }
 
     /**
-     * Builds array of action group => unused arguments
-     * @param array $actionGroups
-     * @return array $actionGroupToArguments
+     * Extract actionGroup DomElement from xml file
+     * @param string $contents
+     * @return \DOMElement
      */
-    private function buildUnusedArgumentList($actionGroups)
+    public function getActionGroupDomElement($contents)
     {
-        $actionGroupToArguments = [];
+        $domDocument = new \DOMDocument();
+        $domDocument->loadXML($contents);
+        return $domDocument->getElementsByTagName('actionGroup')[0];
+    }
 
-        foreach ($actionGroups as $actionGroupXml) {
-            preg_match(self::ACTIONGROUP_NAME_REGEX_PATTERN, $actionGroupXml, $actionGroupName);
-            $unusedArguments = $this->findUnusedArguments($actionGroupXml);
-            if (!empty($unusedArguments)) {
-                $actionGroupToArguments[$actionGroupName[1]] = $unusedArguments;
+    /**
+     * Get list of action group arguments declared in an action group
+     * @param \DOMElement $actionGroup
+     * @return array $arguments
+     */
+    public function extractActionGroupArguments($actionGroup)
+    {
+        $arguments = [];
+        $argumentsNodes = $actionGroup->getElementsByTagName('arguments');
+        if ($argumentsNodes->length > 0) {
+            $argumentNodes = $argumentsNodes[0]->getElementsByTagName('argument');
+            foreach ($argumentNodes as $argumentNode) {
+                $arguments[] = $argumentNode->getAttribute('name');
             }
         }
-        return $actionGroupToArguments;
+        return $arguments;
     }
 
     /**
      * Returns unused arguments in an action group
-     * @param string $actionGroupXml
+     * @param array  $arguments
+     * @param string $contents
      * @return array
      */
-    private function findUnusedArguments($actionGroupXml)
+    public function findUnusedArguments($arguments, $contents)
     {
         $unusedArguments = [];
-
-        preg_match_all(self::ACTIONGROUP_ARGUMENT_REGEX_PATTERN, $actionGroupXml, $arguments);
-        preg_match(self::ACTIONGROUP_NAME_REGEX_PATTERN, $actionGroupXml, $actionGroupName);
+        preg_match(self::ACTIONGROUP_NAME_REGEX_PATTERN, $contents, $actionGroupName);
         $validActionGroup = false;
         try {
             $actionGroup = ActionGroupObjectHandler::getInstance()->getObject($actionGroupName[1]);
@@ -149,18 +165,18 @@ private function findUnusedArguments($actionGroupXml)
             return $unusedArguments;
         }
 
-        foreach ($arguments[1] as $argument) {
+        foreach ($arguments as $argument) {
             //pattern to match all argument references
             $patterns = [
                 '(\{{2}' . $argument . '(\.[a-zA-Z0-9_\[\]\(\).,\'\/ ]+)?}{2})',
                 '([(,\s\'$$]' . $argument . '(\.[a-zA-Z0-9_$\[\]]+)?[),\s\'])'
             ];
             // matches entity references
-            if (preg_match($patterns[0], $actionGroupXml)) {
+            if (preg_match($patterns[0], $contents)) {
                 continue;
             }
             //matches parametrized references
-            if (preg_match($patterns[1], $actionGroupXml)) {
+            if (preg_match($patterns[1], $contents)) {
                 continue;
             }
             //for extending action groups, exclude arguments that are also defined in parent action group
@@ -196,8 +212,8 @@ private function isParentActionGroupArgument($argument, $actionGroup)
     /**
      * Builds and returns error output for violating references
      *
-     * @param array  $actionGroupToArguments
-     * @param string $path
+     * @param array       $actionGroupToArguments
+     * @param SplFileInfo $path
      * @return mixed
      */
     private function setErrorOutput($actionGroupToArguments, $path)
diff --git a/src/Magento/FunctionalTestingFramework/Upgrade/RemoveUnusedArguments.php b/src/Magento/FunctionalTestingFramework/Upgrade/RemoveUnusedArguments.php
new file mode 100644
index 000000000..ced1042ad
--- /dev/null
+++ b/src/Magento/FunctionalTestingFramework/Upgrade/RemoveUnusedArguments.php
@@ -0,0 +1,65 @@
+<?php
+/**
+ * Copyright © Magento, Inc. All rights reserved.
+ * See COPYING.txt for license details.
+ */
+
+namespace Magento\FunctionalTestingFramework\Upgrade;
+
+use Magento\FunctionalTestingFramework\StaticCheck\ActionGroupArgumentsCheck;
+use Magento\FunctionalTestingFramework\Util\Script\ScriptUtil;
+use Symfony\Component\Console\Input\InputInterface;
+use Symfony\Component\Console\Output\OutputInterface;
+use Symfony\Component\Filesystem\Filesystem;
+use DOMElement;
+
+/**
+ * Class RenameMetadataFiles
+ * @package Magento\FunctionalTestingFramework\Upgrade
+ */
+class RemoveUnusedArguments implements UpgradeInterface
+{
+    const ARGUMENTS_BLOCK_REGEX_PATTERN = "/\s*<arguments.*\/arguments>/s";
+
+    /**
+     * Updates all actionGroup xml files
+     *
+     * @param InputInterface  $input
+     * @param OutputInterface $output
+     * @return string
+     */
+    public function execute(InputInterface $input, OutputInterface $output)
+    {
+        $scriptUtil = new ScriptUtil();
+        $testPaths[] = $input->getArgument('path');
+        if (empty($testPaths[0])) {
+            $testPaths = $scriptUtil->getAllModulePaths();
+        }
+        $xmlFiles = $scriptUtil->getModuleXmlFilesByScope($testPaths, 'ActionGroup');
+        $actionGroupsUpdated = 0;
+        $fileSystem = new Filesystem();
+        foreach ($xmlFiles as $file) {
+            $contents = $file->getContents();
+            $argumentsCheck = new ActionGroupArgumentsCheck();
+            /** @var DOMElement $actionGroup */
+            $actionGroup = $argumentsCheck->getActionGroupDomElement($contents);
+            $allArguments = $argumentsCheck->extractActionGroupArguments($actionGroup);
+            $unusedArguments = $argumentsCheck->findUnusedArguments($allArguments, $contents);
+            if (empty($unusedArguments)) {
+                continue;
+            }
+            //Remove <arguments> block if all arguments are unused
+            if (empty(array_diff($allArguments, $unusedArguments))) {
+                $contents = preg_replace(self::ARGUMENTS_BLOCK_REGEX_PATTERN, '', $contents);
+            } else {
+                foreach ($unusedArguments as $argument) {
+                    $argumentRegexPattern = "/\s*<argument.*name\s*=\s*\"".$argument."\".*\/>/";
+                    $contents = preg_replace($argumentRegexPattern, '', $contents);
+                }
+            }
+            $fileSystem->dumpFile($file->getRealPath(), $contents);
+            $actionGroupsUpdated++;
+        }
+        return "Removed unused action group arguments from {$actionGroupsUpdated} file(s).";
+    }
+}
diff --git a/src/Magento/FunctionalTestingFramework/Upgrade/UpgradeScriptList.php b/src/Magento/FunctionalTestingFramework/Upgrade/UpgradeScriptList.php
index 6293b589b..cf2aabe2d 100644
--- a/src/Magento/FunctionalTestingFramework/Upgrade/UpgradeScriptList.php
+++ b/src/Magento/FunctionalTestingFramework/Upgrade/UpgradeScriptList.php
@@ -28,6 +28,7 @@ class UpgradeScriptList implements UpgradeScriptListInterface
     public function __construct(array $scripts = [])
     {
         $this->scripts = [
+            'removeUnusedArguments' => new RemoveUnusedArguments(),
             'upgradeTestSchema' => new UpdateTestSchemaPaths(),
             'upgradeAssertionSchema' => new UpdateAssertionSchema(),
             'renameMetadataFiles' => new RenameMetadataFiles(),