diff --git a/changelog/bugfixes/2026-09-22-flatcar-install.md b/changelog/bugfixes/2026-09-22-flatcar-install.md
new file mode 100644
index 00000000000..74cd1a58351
--- /dev/null
+++ b/changelog/bugfixes/2026-09-22-flatcar-install.md
@@ -0,0 +1 @@
+- Fixed 'flatcar-install' quotes bug with new '/etc/os-release' file format ([flatcar#2425](https://github.com/flatcar/Flatcar/issues/2425))
diff --git a/sdk_container/src/third_party/coreos-overlay/coreos-base/coreos-init/Manifest b/sdk_container/src/third_party/coreos-overlay/coreos-base/coreos-init/Manifest
index 27dd84b81b9..c870be29ee8 100644
--- a/sdk_container/src/third_party/coreos-overlay/coreos-base/coreos-init/Manifest
+++ b/sdk_container/src/third_party/coreos-overlay/coreos-base/coreos-init/Manifest
@@ -1 +1 @@
-DIST coreos-init-77ffa2ca15cc4a78fda1268ed830bd15604b6533.tar.gz 60347 BLAKE2B acf7a0a28026fcf2d215bca9749f3fc2b78020fbae1b99ee8506191a10cfc49564684fe73ac11c8cac88486789d4263fce82c4d9e4686df800593b7654e44105 SHA512 49ec6c0c4353611f310c34fa7dd304cac55eece8ff74255da19b6cd45d70124f8f3a8a9a7928707220a0a4c7610b827bd9669ef2105008a80b88d9e14cb0ab59
+DIST coreos-init-0765e955aca24034d66b9389e0d538e4c3ee543c.tar.gz 60363 BLAKE2B b6f9ab0d79a381883b73fc899eb6085a722bd3d3cde1cf1485c3d314bc9688a055ebcbe81170408c946eba0334b6b5e3a83e0e4078df951f964d0991b9cfa916 SHA512 209ad4392cccfa356c9980baa7b458e2f13d3a782539a207c9f6d3e5dc8ae2019c9dac15039175bf5269ac30498d0e512541fd4120e587fad2536b82860765e4
diff --git a/sdk_container/src/third_party/coreos-overlay/coreos-base/coreos-init/coreos-init-0.0.1-r208.ebuild b/sdk_container/src/third_party/coreos-overlay/coreos-base/coreos-init/coreos-init-0.0.1-r209.ebuild
similarity index 100%
rename from sdk_container/src/third_party/coreos-overlay/coreos-base/coreos-init/coreos-init-0.0.1-r208.ebuild
rename to sdk_container/src/third_party/coreos-overlay/coreos-base/coreos-init/coreos-init-0.0.1-r209.ebuild
diff --git a/sdk_container/src/third_party/coreos-overlay/coreos-base/coreos-init/coreos-init-9999.ebuild b/sdk_container/src/third_party/coreos-overlay/coreos-base/coreos-init/coreos-init-9999.ebuild
index 5f44bbd7095..badc1648612 100644
--- a/sdk_container/src/third_party/coreos-overlay/coreos-base/coreos-init/coreos-init-9999.ebuild
+++ b/sdk_container/src/third_party/coreos-overlay/coreos-base/coreos-init/coreos-init-9999.ebuild
@@ -14,7 +14,7 @@ if [[ ${PV} == 9999 ]]; then
 	EGIT_REPO_URI="https://github.com/flatcar/init.git"
 	inherit git-r3
 else
-	EGIT_VERSION="77ffa2ca15cc4a78fda1268ed830bd15604b6533" # flatcar-master
+	EGIT_VERSION="0765e955aca24034d66b9389e0d538e4c3ee543c" # flatcar-master
 	SRC_URI="https://github.com/flatcar/init/archive/${EGIT_VERSION}.tar.gz -> ${PN}-${EGIT_VERSION}.tar.gz"
 	S="${WORKDIR}/init-${EGIT_VERSION}"
 	KEYWORDS="amd64 arm arm64 x86"