Solution: You get this issue when trying to migrate the vm or a template. To fix this issue VMware has release an update 2 for VMware vcenter server. If you are not ready for an upgrade then you can just remove and re-add the vm/template.
Here is the step by step process:

  1. Shutdown the VM machine
  2. Make note of the ESX server and Datastore where VM is located
  3. Right-click the VM and click remove from Inventory
  4. Go to the ESX server and select Configuration and then storage
  5. Right click on the Datastore and locate the VM
  6. Right-click the VM.vmx file and click Add to Inventory