diff --git a/client/internal/engine.go b/client/internal/engine.go
index 75f1d1012..80dfb10bf 100644
--- a/client/internal/engine.go
+++ b/client/internal/engine.go
@@ -76,6 +76,9 @@ const (
 	PeerConnectionTimeoutMax = 45000 // ms
 	PeerConnectionTimeoutMin = 30000 // ms
 	connInitLimit            = 200
+	// skipAutoUpdateVersion used as a placeholder for autoUpdateVersion in proto responses to indicate response contains no new updates
+	skipAutoUpdateVersion = "skip"
+	disableAutoUpdate     = "disabled"
 )
 
 var ErrResetConnection = fmt.Errorf("reset connection")
@@ -704,15 +707,17 @@ func (e *Engine) handleSync(update *mgmProto.SyncResponse) error {
 	e.syncMsgMux.Lock()
 	defer e.syncMsgMux.Unlock()
 
-	if e.updateManager == nil && update.GetAutoUpdateVersion() != "disabled" {
-		e.updateManager = updatemanager.NewUpdateManager(e.statusRecorder)
-		e.updateManager.Start(e.ctx)
-	} else if e.updateManager != nil && update.GetAutoUpdateVersion() == "disabled" {
-		e.updateManager.Stop()
-		e.updateManager = nil
-	}
-	if e.updateManager != nil {
-		e.updateManager.SetVersion(update.GetAutoUpdateVersion())
+	if update.GetAutoUpdateVersion() != skipAutoUpdateVersion {
+		if e.updateManager == nil && update.GetAutoUpdateVersion() != disableAutoUpdate {
+			e.updateManager = updatemanager.NewUpdateManager(e.statusRecorder)
+			e.updateManager.Start(e.ctx)
+		} else if e.updateManager != nil && update.GetAutoUpdateVersion() == disableAutoUpdate {
+			e.updateManager.Stop()
+			e.updateManager = nil
+		}
+		if e.updateManager != nil {
+			e.updateManager.SetVersion(update.GetAutoUpdateVersion())
+		}
 	}
 	if update.GetNetbirdConfig() != nil {
 		wCfg := update.GetNetbirdConfig()
diff --git a/client/internal/updatemanager/manager.go b/client/internal/updatemanager/manager.go
index b537f0df1..d82f79ebe 100644
--- a/client/internal/updatemanager/manager.go
+++ b/client/internal/updatemanager/manager.go
@@ -34,8 +34,9 @@ type UpdateManager struct {
 	cancel context.CancelFunc
 	update *version.Update
 
-	expectedVersion      string
-	expectedVersionMutex sync.Mutex
+	expectedVersion       *v.Version
+	updateToLatestVersion bool
+	expectedVersionMutex  sync.Mutex
 }
 
 func NewUpdateManager(statusRecorder *peer.Status) *UpdateManager {
@@ -69,7 +70,7 @@ func (u *UpdateManager) Start(ctx context.Context) {
 	go u.updateLoop(ctx)
 }
 
-func (u *UpdateManager) SetVersion(v string) {
+func (u *UpdateManager) SetVersion(expectedVersion string) {
 	if u.cancel == nil {
 		log.Errorf("UpdateManager not started")
 		return
@@ -77,12 +78,22 @@ func (u *UpdateManager) SetVersion(v string) {
 
 	u.expectedVersionMutex.Lock()
 	defer u.expectedVersionMutex.Unlock()
-	if u.expectedVersion == v {
-		return
+	if expectedVersion == latestVersion {
+		u.updateToLatestVersion = true
+		u.expectedVersion = nil
+	} else {
+		expectedSemVer, err := v.NewVersion(expectedVersion)
+		if err != nil {
+			log.Errorf("Error parsing version: %v", err)
+			return
+		}
+		if u.expectedVersion.Equal(expectedSemVer) {
+			return
+		}
+		u.expectedVersion = expectedSemVer
+		u.updateToLatestVersion = false
 	}
 
-	u.expectedVersion = v
-
 	select {
 	case u.mgmUpdateChan <- struct{}{}:
 	default:
@@ -126,19 +137,17 @@ func (u *UpdateManager) handleUpdate(ctx context.Context) {
 	u.expectedVersionMutex.Unlock()
 
 	// Resolve "latest" to actual version
-	if expectedVersion == latestVersion {
+	if u.updateToLatestVersion {
 		if !u.isVersionAvailable() {
 			log.Tracef("Latest version not fetched yet")
 			return
 		}
 		updateVersion = u.update.LatestVersion()
+	} else if u.expectedVersion != nil {
+		updateVersion = expectedVersion
 	} else {
-		var err error
-		updateVersion, err = v.NewSemver(expectedVersion)
-		if err != nil {
-			log.Errorf("Failed to parse latest version: %v", err)
-			return
-		}
+		log.Debugf("No expected version information set")
+		return
 	}
 
 	if !u.shouldUpdate(updateVersion) {
diff --git a/management/server/account.go b/management/server/account.go
index a2a9e3b67..a8bdafa3d 100644
--- a/management/server/account.go
+++ b/management/server/account.go
@@ -52,6 +52,8 @@ const (
 	peerSchedulerRetryInterval = 3 * time.Second
 	emptyUserID                = "empty user ID in claims"
 	errorGettingDomainAccIDFmt = "error getting account ID by private domain: %v"
+	// skipAutoUpdateVersion used as a placeholder for autoUpdateVersion in proto responses to indicate response contains no new updates
+	skipAutoUpdateVersion = "skip"
 )
 
 type userLoggedInOnce bool
diff --git a/management/server/http/handlers/accounts/accounts_handler.go b/management/server/http/handlers/accounts/accounts_handler.go
index 23adc077f..634ff87e0 100644
--- a/management/server/http/handlers/accounts/accounts_handler.go
+++ b/management/server/http/handlers/accounts/accounts_handler.go
@@ -28,7 +28,9 @@ const (
 	// MinNetworkBits is the minimum prefix length for IPv4 network ranges (e.g., /29 gives 8 addresses, /28 gives 16)
 	MinNetworkBitsIPv4 = 28
 	// MinNetworkBitsIPv6 is the minimum prefix length for IPv6 network ranges
-	MinNetworkBitsIPv6 = 120
+	MinNetworkBitsIPv6      = 120
+	disableAutoUpdate       = "disabled"
+	autoUpdateLatestVersion = "latest"
 )
 
 // handler is a handler that handles the server.Account HTTP endpoints
@@ -206,8 +208,8 @@ func (h *handler) updateAccountRequestSettings(req api.PutApiAccountsAccountIdJS
 	}
 	if req.Settings.AutoUpdateVersion != nil {
 		_, err := goversion.NewSemver(*req.Settings.AutoUpdateVersion)
-		if *req.Settings.AutoUpdateVersion == "latest" ||
-			*req.Settings.AutoUpdateVersion == "disabled" ||
+		if *req.Settings.AutoUpdateVersion == autoUpdateLatestVersion ||
+			*req.Settings.AutoUpdateVersion == disableAutoUpdate ||
 			err == nil {
 			returnSettings.AutoUpdateVersion = *req.Settings.AutoUpdateVersion
 		} else if *req.Settings.AutoUpdateVersion != "" {
diff --git a/management/server/token_mgr.go b/management/server/token_mgr.go
index 7f5d26b39..5ff381d84 100644
--- a/management/server/token_mgr.go
+++ b/management/server/token_mgr.go
@@ -210,7 +210,7 @@ func (m *TimeBasedAuthSecretsManager) pushNewTURNAndRelayTokens(ctx context.Cont
 		NetbirdConfig: &proto.NetbirdConfig{
 			Turns: turns,
 		},
-		AutoUpdateVersion: "skip",
+		AutoUpdateVersion: skipAutoUpdateVersion,
 	}
 
 	// workaround for the case when client is unable to handle turn and relay updates at different time
@@ -247,7 +247,7 @@ func (m *TimeBasedAuthSecretsManager) pushNewRelayTokens(ctx context.Context, ac
 			},
 			// omit Turns to avoid updates there
 		},
-		AutoUpdateVersion: "skip",
+		AutoUpdateVersion: skipAutoUpdateVersion,
 	}
 
 	m.extendNetbirdConfig(ctx, peerID, accountID, update)