diff --git a/etc/kayobe/ipa.yml b/etc/kayobe/ipa.yml
index 718e4f8411..5bed854a9e 100644
--- a/etc/kayobe/ipa.yml
+++ b/etc/kayobe/ipa.yml
@@ -47,7 +47,9 @@ ipa_build_dib_elements_extra:
 
 # Dictionary of additional environment variables to provide to Diskimage
 # Builder (DIB) during IPA image build.
-#ipa_build_dib_env_extra:
+#TODO(ClaudiaWatson): remove DIB_IPA_COMPRESS_CMD for Flamingo
+ipa_build_dib_env_extra:
+  DIB_IPA_COMPRESS_CMD: 'zstd -19'
 
 # Dictionary of environment variables to provide to Diskimage Builder (DIB)
 # during IPA image build.
diff --git a/etc/kayobe/pulp-ipa-image-versions.yml b/etc/kayobe/pulp-ipa-image-versions.yml
index 94ead8d8c4..2872d7ab02 100644
--- a/etc/kayobe/pulp-ipa-image-versions.yml
+++ b/etc/kayobe/pulp-ipa-image-versions.yml
@@ -1,4 +1,4 @@
 ---
 # IPA image versioning tags
-stackhpc_rocky_9_ipa_image_version: "2025.1-20250924T145101"
-stackhpc_ubuntu_noble_ipa_image_version: "2025.1-20250924T145101"
+stackhpc_rocky_9_ipa_image_version: "2025.1-20250929T120332"
+stackhpc_ubuntu_noble_ipa_image_version: "2025.1-20250929T120332"
diff --git a/releasenotes/notes/change-IPA-compression-algorithm-to-zstd-19-3be452025b781fbb.yaml b/releasenotes/notes/change-IPA-compression-algorithm-to-zstd-19-3be452025b781fbb.yaml
new file mode 100644
index 0000000000..db609bf6d0
--- /dev/null
+++ b/releasenotes/notes/change-IPA-compression-algorithm-to-zstd-19-3be452025b781fbb.yaml
@@ -0,0 +1,13 @@
+---
+features:
+  - |
+    Changed the IPA (Ironic Python Agent) image compression
+    algorithm from the default ``gzip`` to ``zstd``. This
+    improves provising performance by reducing the size of the
+    IPA boot ISO transferred from the Ironic conductor to the
+    baremetal nodes.
+upgrade:
+  - |
+    Upgraded compression algorithm from ``gzip to ``zstd``.
+    IPA image versions in ``pulp-ipa-image-versions.yml`` updated
+    to use new compressed images.