diff --git a/sdk_container/src/third_party/coreos-overlay/changelog/bugfixes/2023-02-20-preserve-kubernetes-interfaces.md b/sdk_container/src/third_party/coreos-overlay/changelog/bugfixes/2023-02-20-preserve-kubernetes-interfaces.md
new file mode 100644
index 0000000000..ec2d3ee1b3
--- /dev/null
+++ b/sdk_container/src/third_party/coreos-overlay/changelog/bugfixes/2023-02-20-preserve-kubernetes-interfaces.md
@@ -0,0 +1 @@
+- Excluded the special Kubernetes network interfaces `nodelocaldns` and `kube-ipvs0` from being managed with systemd-networkd which interfered with the setup ([init#89](https://github.com/flatcar/init/pull/89)).
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 4736496db9..7825d2271e 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
@@ -10,7 +10,7 @@ CROS_WORKON_REPO="https://github.com"
 if [[ "${PV}" == 9999 ]]; then
 	KEYWORDS="~amd64 ~arm ~arm64 ~x86"
 else
-	CROS_WORKON_COMMIT="ef534d83fb5ccfa3498e18e0fc7fac6d63aa82ef" # flatcar-master
+	CROS_WORKON_COMMIT="c97767857f7d9aff54645796635814f7be423e31" # flatcar-master
 	KEYWORDS="amd64 arm arm64 x86"
 fi