diff --git a/pkg/config/setup/BUILD.bazel b/pkg/config/setup/BUILD.bazel
index e17eb3908f31..57871add76f4 100644
--- a/pkg/config/setup/BUILD.bazel
+++ b/pkg/config/setup/BUILD.bazel
@@ -84,6 +84,7 @@ go_library(
 dd_agent_go_test(
     name = "setup_test",
     srcs = [
+        "config_init_test.go",
         "config_secret_test.go",
         "config_test.go",
         "privateactionrunner_test.go",
diff --git a/pkg/config/setup/config.go b/pkg/config/setup/config.go
index 1cf255e84d5e..ee300190ed37 100644
--- a/pkg/config/setup/config.go
+++ b/pkg/config/setup/config.go
@@ -459,6 +459,8 @@ func LoadDatadog(config pkgconfigmodel.Config, secretResolver secrets.Component,
 
 	useHostEtc(config)
 
+	postProcessSystemProbe(SystemProbe())
+
 	err = checkConflictingOptions(config)
 	if err != nil {
 		return err
diff --git a/pkg/config/setup/config_init.go b/pkg/config/setup/config_init.go
index fe1dbed1dcae..b711cdff7a3a 100644
--- a/pkg/config/setup/config_init.go
+++ b/pkg/config/setup/config_init.go
@@ -19,7 +19,4 @@ func fixupInitConfig() {
 	ddcfg := Datadog()
 	fixupInitCommonConfigComponents(ddcfg)
 	fixupInitFullAgentOnlyComponents(ddcfg)
-
-	sysprobe := SystemProbe()
-	fixupInitSystemProbe(sysprobe)
 }
diff --git a/pkg/config/setup/config_init_test.go b/pkg/config/setup/config_init_test.go
new file mode 100644
index 000000000000..e3116383b0b3
--- /dev/null
+++ b/pkg/config/setup/config_init_test.go
@@ -0,0 +1,52 @@
+// Unless explicitly stated otherwise all files in this repository are licensed
+// under the Apache License Version 2.0.
+// This product includes software developed at Datadog (https://www.datadoghq.com/).
+// Copyright 2016-present Datadog, Inc.
+
+//go:build test && !serverless
+
+package setup
+
+import (
+	"os"
+	"path/filepath"
+	"strings"
+	"testing"
+
+	"github.com/stretchr/testify/require"
+
+	delegatedauthmock "github.com/DataDog/datadog-agent/comp/core/delegatedauth/mock"
+	secretsmock "github.com/DataDog/datadog-agent/comp/core/secrets/mock"
+	pkgconfigmodel "github.com/DataDog/datadog-agent/pkg/config/model"
+)
+
+// Regression test: the HOST_ETC repo dir rewrite used to run before the config was ready
+// (and before HOST_ETC auto-detection), so it silently never applied.
+func TestPostProcessSystemProbeRunsAfterConfigIsReady(t *testing.T) {
+	origDatadog := Datadog().(pkgconfigmodel.BuildableConfig)
+	origSystemProbe := SystemProbe().(pkgconfigmodel.BuildableConfig)
+	t.Cleanup(func() {
+		SetDatadog(origDatadog)         // nolint: forbidigo // restoring the singleton after the test
+		SetSystemProbe(origSystemProbe) // nolint: forbidigo // restoring the singleton after the test
+	})
+
+	InitConfigObjects()
+
+	t.Setenv("HOST_ETC", "/host/etc")
+
+	configPath := filepath.Join(t.TempDir(), "empty_conf.yaml")
+	require.NoError(t, os.WriteFile(configPath, nil, 0o600))
+	Datadog().(pkgconfigmodel.BuildableConfig).SetConfigFile(configPath)
+
+	err := LoadDatadog(Datadog(), secretsmock.New(t), delegatedauthmock.New(t), nil)
+	require.NoError(t, err)
+
+	for _, name := range []string{
+		"system_probe_config.apt_config_dir",
+		"system_probe_config.yum_repos_dir",
+		"system_probe_config.zypper_repos_dir",
+	} {
+		val := SystemProbe().GetString(name)
+		require.True(t, strings.HasPrefix(val, "/host/etc"), "expected %s to be rooted under HOST_ETC, got %q", name, val)
+	}
+}
diff --git a/pkg/config/setup/fixup_init.go b/pkg/config/setup/fixup_init.go
index 66909a632a6a..b8af74d8e9a9 100644
--- a/pkg/config/setup/fixup_init.go
+++ b/pkg/config/setup/fixup_init.go
@@ -117,8 +117,9 @@ func fixupInitFullAgentOnlyComponents(_ pkgconfigmodel.Config) {
 	pkgconfigmodel.AddOverrideFunc(sanitizeExternalMetricsProviderChunkSize)
 }
 
-// called only for system-probe, after declaring settings
-func fixupInitSystemProbe(config pkgconfigmodel.Config) {
+// postProcessSystemProbe rewrites system-probe repo dir defaults to live under HOST_ETC.
+// Called from LoadDatadog, after the config is ready and HOST_ETC has been determined.
+func postProcessSystemProbe(config pkgconfigmodel.Config) {
 	if value, _ := os.LookupEnv("HOST_ETC"); value != "" {
 		for _, name := range []string{
 			"system_probe_config.apt_config_dir",