Coping with failures in modern distributed storage systems that handle massive volumes of heterogeneous and potentially rapidly changing data, has become a very important challenge. A common practice is to utilize fault tolerance methods like Replication and Erasure Coding for maximizing data availability. However, while erasure codes provide better fault tolerance compared to replication with a more affordable storage overhead, they frequently suffer from high reconstruction cost as they require to access all available nodes when a data block needs to be repaired, and also can repair up to a limited number of unavailable data blocks, depending on the number of the code’s parity block capabilities. Furthermore, storing and placing the encoded data in the federated storage system also remains a challenge. In this paper we present Fed-DIC, a framework which combines Diagonally Interleaved Coding on client devices at the edge of the network with organized storage of encoded data in a federated cloud system comprised of multiple independent storage clusters. The erasure coding operations are performed on client devices at the edge while they interact with the federated cloud to store the encoded data. We describe how our solution integrates the functionality of federated clouds alongside erasure coding implemented on edge devices for maximizing data availability and we evaluate the working and benefits of our approach in terms of read access cost, data availability, storage overhead, load balancing and network bandwidth rate compared to popular Replication and Erasure Coding schemes.