diff --git a/test_runner/fixtures/neon_fixtures.py b/test_runner/fixtures/neon_fixtures.py
index 390b94c2ea..da379693a0 100644
--- a/test_runner/fixtures/neon_fixtures.py
+++ b/test_runner/fixtures/neon_fixtures.py
@@ -701,6 +701,11 @@ class NeonEnvBuilder:
         config["default_tenant_id"] = snapshot_config["default_tenant_id"]
         config["branch_name_mappings"] = snapshot_config["branch_name_mappings"]
 
+        # Update the config with new neon + postgres path in case of compat test
+        # FIXME: overriding pg_distrib_dir cause storage controller fail to start
+        # config["pg_distrib_dir"] = str(self.pg_distrib_dir)
+        config["neon_distrib_dir"] = str(self.neon_binpath)
+
         with (self.repo_dir / "config").open("w") as f:
             toml.dump(config, f)