diff --git a/changelog/_9106.txt b/changelog/_9106.txt
new file mode 100644
index 0000000000..93abe4a3bb
--- /dev/null
+++ b/changelog/_9106.txt
@@ -0,0 +1,3 @@
+```release-note:bug
+secrets/transit: Fix error when using ed25519 keys that were imported with derivation enabled
+```
diff --git a/sdk/helper/keysutil/lock_manager.go b/sdk/helper/keysutil/lock_manager.go
index 4b8e719627..ec399857e1 100644
--- a/sdk/helper/keysutil/lock_manager.go
+++ b/sdk/helper/keysutil/lock_manager.go
@@ -495,6 +495,13 @@ func (lm *LockManager) GetPolicy(ctx context.Context, req PolicyRequest, rand io
 		}
 	}
 
+	if p.Imported && p.Derived && p.KDF == Kdf_hmac_sha256_counter {
+		if err := p.setKDF(ctx, req.Storage, Kdf_hkdf_sha256); err != nil {
+			cleanup()
+			return nil, false, err
+		}
+	}
+
 	if lm.useCache {
 		lm.cache.Store(req.Name, p)
 	} else {
@@ -551,6 +558,19 @@ func (lm *LockManager) ImportPolicy(ctx context.Context, req PolicyRequest, key
 		}
 	}
 
+	if req.Derived {
+		p.KDF = Kdf_hkdf_sha256
+		if req.Convergent {
+			p.ConvergentEncryption = true
+			// As of version 3 we store the version within each key, so we
+			// set to -1 to indicate that the value in the policy has no
+			// meaning. We still, for backwards compatibility, fall back to
+			// this value if the key doesn't have one, which means it will
+			// only be -1 in the case where every key version is >= 3
+			p.ConvergentVersion = -1
+		}
+	}
+
 	err = p.ImportPublicOrPrivate(ctx, req.Storage, key, req.IsPrivateKey, rand)
 	if err != nil {
 		return fmt.Errorf("error importing key: %s", err)
diff --git a/sdk/helper/keysutil/lock_manager_test.go b/sdk/helper/keysutil/lock_manager_test.go
new file mode 100644
index 0000000000..ba71e0873a
--- /dev/null
+++ b/sdk/helper/keysutil/lock_manager_test.go
@@ -0,0 +1,100 @@
+// Copyright (c) HashiCorp, Inc.
+// SPDX-License-Identifier: MPL-2.0
+
+package keysutil
+
+import (
+	"context"
+	"crypto/rand"
+	"testing"
+
+	"github.com/hashicorp/vault/sdk/logical"
+	"github.com/stretchr/testify/require"
+)
+
+func TestImportPolicy(t *testing.T) {
+	lm, err := NewLockManager(false, 0)
+	require.NoError(t, err)
+
+	ctx := context.Background()
+	storage := &logical.InmemStorage{}
+
+	testKeys, err := generateTestKeys()
+	require.NoError(t, err)
+
+	testCases := map[string]struct {
+		req       PolicyRequest
+		key       []byte
+		expectErr bool
+	}{
+		"import AES key": {
+			req: PolicyRequest{
+				Name:         "test-aes-key",
+				KeyType:      KeyType_AES256_GCM96,
+				Storage:      storage,
+				IsPrivateKey: true,
+			},
+			key: testKeys[KeyType_AES256_GCM96],
+		},
+		"import RSA key": {
+			req: PolicyRequest{
+				Name:         "test-rsa-key",
+				KeyType:      KeyType_RSA2048,
+				Storage:      storage,
+				IsPrivateKey: true,
+			},
+			key: testKeys[KeyType_RSA2048],
+		},
+		"import ECDSA key": {
+			req: PolicyRequest{
+				Name:         "test-ecdsa-key",
+				KeyType:      KeyType_ECDSA_P256,
+				Storage:      storage,
+				IsPrivateKey: true,
+			},
+			key: testKeys[KeyType_ECDSA_P256],
+		},
+		"import ED25519 key": {
+			req: PolicyRequest{
+				Name:         "test-ed25519-key",
+				KeyType:      KeyType_ED25519,
+				Storage:      storage,
+				IsPrivateKey: true,
+			},
+			key: testKeys[KeyType_ED25519],
+		},
+		"import ed25519 with derivation": {
+			req: PolicyRequest{
+				Name:         "ed25519-derived",
+				KeyType:      KeyType_ED25519,
+				Storage:      storage,
+				IsPrivateKey: true,
+				Derived:      true,
+			},
+			key: testKeys[KeyType_ED25519],
+		},
+	}
+
+	for name, tt := range testCases {
+		t.Run(name, func(t *testing.T) {
+			err = lm.ImportPolicy(ctx, tt.req, tt.key, rand.Reader)
+			if tt.expectErr {
+				require.Error(t, err)
+			} else {
+				require.NoError(t, err)
+
+				pol, upserted, err := lm.GetPolicy(ctx, PolicyRequest{Name: tt.req.Name, Storage: storage}, rand.Reader)
+				require.NoError(t, err)
+				require.False(t, upserted)
+
+				defer pol.Unlock()
+
+				require.Equal(t, tt.req.KeyType, pol.Type)
+				if tt.req.Derived {
+					require.True(t, pol.Derived)
+					require.Equal(t, Kdf_hkdf_sha256, pol.KDF)
+				}
+			}
+		})
+	}
+}
diff --git a/sdk/helper/keysutil/policy.go b/sdk/helper/keysutil/policy.go
index 6d69937423..488883f159 100644
--- a/sdk/helper/keysutil/policy.go
+++ b/sdk/helper/keysutil/policy.go
@@ -2876,3 +2876,14 @@ func generateECDSAKey(keyType KeyType, entry *KeyEntry) error {
 
 	return nil
 }
+
+func (p *Policy) setKDF(ctx context.Context, storage logical.Storage, kdf int) error {
+	p.KDF = kdf
+
+	err := p.Persist(ctx, storage)
+	if err != nil {
+		return err
+	}
+
+	return nil
+}