diff --git a/pkg/pkgrepository/crd_app.go b/pkg/pkgrepository/crd_app.go
index f23981e0f..02a064982 100644
--- a/pkg/pkgrepository/crd_app.go
+++ b/pkg/pkgrepository/crd_app.go
@@ -17,6 +17,7 @@ import (
 	"carvel.dev/kapp-controller/pkg/template"
 	"github.com/go-logr/logr"
 	metav1 "k8s.io/apimachinery/pkg/apis/meta/v1"
+	"k8s.io/client-go/util/retry"
 	"sigs.k8s.io/controller-runtime/pkg/reconcile"
 )
 
@@ -107,14 +108,19 @@ func (a *CRDApp) updateStatusOnce() error {
 func (a *CRDApp) updatePackageRepository(updateFunc func(*pkgingv1alpha1.PackageRepository)) error {
 	a.log.Info("Updating PackageRepository")
 
-	existingRepo, err := a.appClient.PackagingV1alpha1().PackageRepositories(a.pkgrModel.Namespace).Get(context.Background(), a.pkgrModel.Name, metav1.GetOptions{})
-	if err != nil {
-		return fmt.Errorf("Updating PackageRepository: %s", err)
-	}
+	// PackageRepository may be modified concurrently (e.g. by other controllers),
+	// so refetch and reapply changes when update is rejected due to a conflict
+	err := retry.RetryOnConflict(retry.DefaultRetry, func() error {
+		existingRepo, err := a.appClient.PackagingV1alpha1().PackageRepositories(a.pkgrModel.Namespace).Get(context.Background(), a.pkgrModel.Name, metav1.GetOptions{})
+		if err != nil {
+			return err
+		}
 
-	updateFunc(existingRepo)
+		updateFunc(existingRepo)
 
-	_, err = a.appClient.PackagingV1alpha1().PackageRepositories(existingRepo.Namespace).Update(context.Background(), existingRepo, metav1.UpdateOptions{})
+		_, err = a.appClient.PackagingV1alpha1().PackageRepositories(existingRepo.Namespace).Update(context.Background(), existingRepo, metav1.UpdateOptions{})
+		return err
+	})
 	if err != nil {
 		return fmt.Errorf("Updating PackageRepository: %s", err)
 	}
diff --git a/pkg/pkgrepository/crd_app_test.go b/pkg/pkgrepository/crd_app_test.go
new file mode 100644
index 000000000..2a1a02463
--- /dev/null
+++ b/pkg/pkgrepository/crd_app_test.go
@@ -0,0 +1,100 @@
+// Copyright 2026 The Carvel Authors.
+// SPDX-License-Identifier: Apache-2.0
+
+package pkgrepository
+
+import (
+	"context"
+	"fmt"
+	"testing"
+
+	kcv1alpha1 "carvel.dev/kapp-controller/pkg/apis/kappctrl/v1alpha1"
+	pkgingv1alpha1 "carvel.dev/kapp-controller/pkg/apis/packaging/v1alpha1"
+	"carvel.dev/kapp-controller/pkg/client/clientset/versioned/fake"
+	"carvel.dev/kapp-controller/pkg/deploy"
+	"carvel.dev/kapp-controller/pkg/exec"
+	"carvel.dev/kapp-controller/pkg/fetch"
+	"carvel.dev/kapp-controller/pkg/kubeconfig"
+	"carvel.dev/kapp-controller/pkg/metrics"
+	"carvel.dev/kapp-controller/pkg/template"
+	"github.com/stretchr/testify/assert"
+	"github.com/stretchr/testify/require"
+	"k8s.io/apimachinery/pkg/api/errors"
+	metav1 "k8s.io/apimachinery/pkg/apis/meta/v1"
+	"k8s.io/apimachinery/pkg/runtime"
+	"k8s.io/apimachinery/pkg/runtime/schema"
+	k8sfake "k8s.io/client-go/kubernetes/fake"
+	k8stesting "k8s.io/client-go/testing"
+	logf "sigs.k8s.io/controller-runtime/pkg/log"
+)
+
+func TestUnblockDeletionRetriesOnConflict(t *testing.T) {
+	pkgr := pkgrWithFinalizers()
+	kappcs := fake.NewSimpleClientset(&pkgr)
+
+	updateAttempts := 0
+	kappcs.PrependReactor("update", "packagerepositories", func(_ k8stesting.Action) (bool, runtime.Object, error) {
+		updateAttempts++
+		if updateAttempts <= 2 {
+			return true, nil, errors.NewConflict(schema.GroupResource{Group: "packaging.carvel.dev", Resource: "packagerepositories"},
+				pkgr.Name, fmt.Errorf("the object has been modified; please apply your changes to the latest version and try again"))
+		}
+		// Fall through to the default reactor to persist the update
+		return false, nil, nil
+	})
+
+	err := newTestCRDApp(t, &pkgr, kappcs).unblockDeletion()
+	require.NoError(t, err)
+	assert.Equal(t, 3, updateAttempts)
+
+	updatedPkgr, err := kappcs.PackagingV1alpha1().PackageRepositories(pkgr.Namespace).Get(context.Background(), pkgr.Name, metav1.GetOptions{})
+	require.NoError(t, err)
+	assert.Empty(t, updatedPkgr.Finalizers)
+}
+
+func TestUnblockDeletionDoesNotRetryOnNonConflictError(t *testing.T) {
+	pkgr := pkgrWithFinalizers()
+	kappcs := fake.NewSimpleClientset(&pkgr)
+
+	updateAttempts := 0
+	kappcs.PrependReactor("update", "packagerepositories", func(_ k8stesting.Action) (bool, runtime.Object, error) {
+		updateAttempts++
+		return true, nil, errors.NewInternalError(fmt.Errorf("etcd unavailable"))
+	})
+
+	err := newTestCRDApp(t, &pkgr, kappcs).unblockDeletion()
+	require.Error(t, err)
+	assert.Contains(t, err.Error(), "Updating PackageRepository: Internal error occurred: etcd unavailable")
+	assert.Equal(t, 1, updateAttempts)
+}
+
+func pkgrWithFinalizers() pkgingv1alpha1.PackageRepository {
+	now := metav1.Now()
+	return pkgingv1alpha1.PackageRepository{
+		ObjectMeta: metav1.ObjectMeta{
+			Name:              "repo",
+			Namespace:         "default",
+			DeletionTimestamp: &now,
+			Finalizers:        []string{deleteFinalizerName, deletePrevFinalizerName},
+		},
+		Spec: pkgingv1alpha1.PackageRepositorySpec{
+			Fetch: &pkgingv1alpha1.PackageRepositoryFetch{
+				Inline: &kcv1alpha1.AppFetchInline{},
+			},
+		},
+	}
+}
+
+func newTestCRDApp(t *testing.T, pkgr *pkgingv1alpha1.PackageRepository, kappcs *fake.Clientset) *CRDApp {
+	log := logf.Log.WithName("kc")
+
+	app, err := NewPackageRepoApp(pkgr)
+	require.NoError(t, err)
+
+	k8scs := k8sfake.NewSimpleClientset()
+	fetchFac := fetch.NewFactory(k8scs, fetch.VendirOpts{}, exec.NewPlainCmdRunner())
+	tmpFac := template.NewFactory(k8scs, fetchFac, false, exec.NewPlainCmdRunner())
+	deployFac := deploy.NewFactory(k8scs, kubeconfig.NewKubeconfig(k8scs, log), nil, exec.NewPlainCmdRunner(), log)
+
+	return NewCRDApp(app, pkgr, log, kappcs, metrics.NewMetrics(), fetchFac, tmpFac, deployFac)
+}