diff --git a/go.mod b/go.mod
index 8bc328bb6..ba9563ab3 100644
--- a/go.mod
+++ b/go.mod
@@ -7,7 +7,7 @@ toolchain go1.26.5
 require (
 	buf.build/gen/go/bufbuild/protovalidate/protocolbuffers/go v1.36.11-20260709200747-435963d16310.1
 	buf.build/go/protovalidate v1.2.0
-	github.com/cenkalti/backoff/v4 v4.3.0
+	github.com/cenkalti/backoff/v7 v7.0.0
 	github.com/fsnotify/fsnotify v1.10.1
 	github.com/gabriel-vasile/mimetype v1.4.13
 	github.com/go-resty/resty/v2 v2.17.2
@@ -134,6 +134,7 @@ require (
 	github.com/bytedance/gopkg v0.1.3 // indirect
 	github.com/bytedance/sonic v1.15.0 // indirect
 	github.com/bytedance/sonic/loader v0.5.0 // indirect
+	github.com/cenkalti/backoff/v4 v4.3.0 // indirect
 	github.com/cenkalti/backoff/v5 v5.0.3 // indirect
 	github.com/cespare/xxhash/v2 v2.3.0 // indirect
 	github.com/cloudwego/base64x v0.1.6 // indirect
diff --git a/go.sum b/go.sum
index 22915952a..8c1a66e6b 100644
--- a/go.sum
+++ b/go.sum
@@ -138,6 +138,8 @@ github.com/cenkalti/backoff/v4 v4.3.0 h1:MyRJ/UdXutAwSAT+s3wNd7MfTIcy71VQueUuFK3
 github.com/cenkalti/backoff/v4 v4.3.0/go.mod h1:Y3VNntkOUPxTVeUxJ/G5vcM//AlwfmyYozVcomhLiZE=
 github.com/cenkalti/backoff/v5 v5.0.3 h1:ZN+IMa753KfX5hd8vVaMixjnqRZ3y8CuJKRKj1xcsSM=
 github.com/cenkalti/backoff/v5 v5.0.3/go.mod h1:rkhZdG3JZukswDf7f0cwqPNk4K0sa+F97BxZthm/crw=
+github.com/cenkalti/backoff/v7 v7.0.0 h1:ZP+QAaaOnVUHo+ufFpZ835hbT3x2fy+h2lecVEosZ6A=
+github.com/cenkalti/backoff/v7 v7.0.0/go.mod h1:qcKBGwsu4hpxHtQ8tWYsQ+ifzx2+sS+Xx/3jfe30lI8=
 github.com/census-instrumentation/opencensus-proto v0.2.1/go.mod h1:f6KPmirojxKA12rnyqOA5BBL4O983OfeGPqjHWSTneU=
 github.com/cespare/xxhash/v2 v2.1.1/go.mod h1:VGX0DQ3Q6kWi7AoAeZDth3/j3BFtOZR5XLFGgcrjCOs=
 github.com/cespare/xxhash/v2 v2.3.0 h1:UL815xU9SqsFlibzuggzjXhog7bL6oX9BbNZnL2UFvs=
diff --git a/internal/backoff/backoff.go b/internal/backoff/backoff.go
index f42b14d52..26811ae9b 100644
--- a/internal/backoff/backoff.go
+++ b/internal/backoff/backoff.go
@@ -7,8 +7,9 @@ package backoff
 
 import (
 	"context"
+	"time"
 
-	"github.com/cenkalti/backoff/v4"
+	"github.com/cenkalti/backoff/v7"
 	"github.com/nginx/agent/v3/internal/config"
 )
 
@@ -46,14 +47,51 @@ import (
 //	10           19.210              {stop}
 //
 // Information from https://pkg.go.dev/github.com/cenkalti/backoff/v4#section-readme
+// RetryOptions builds a slice of backoff.RetryOption from the config.BackOff
+// settings and the context. Call sites can pass the returned slice to backoff.Retry as
+// variadic options.
+//
+// If the context has a deadline, the elapsed time limit is set to the remaining
+// time until that deadline (if it's less restrictive than the config-based
+// MaxElapsedTime). This mirrors the v4 API behavior where WithContext would
+// respect the context timeout. If the context has no deadline, the config-based
+// MaxElapsedTime is used.
+func RetryOptions(ctx context.Context, backoffSettings *config.BackOff) []backoff.RetryOption {
+	eb := backoff.NewExponentialBackOff()
+	eb.InitialInterval = backoffSettings.InitialInterval
+	eb.MaxInterval = backoffSettings.MaxInterval
+	eb.RandomizationFactor = backoffSettings.RandomizationFactor
+	eb.Multiplier = backoffSettings.Multiplier
+
+	maxElapsedTime := backoffSettings.MaxElapsedTime
+	if deadline, ok := ctx.Deadline(); ok {
+		timeUntilDeadline := time.Until(deadline)
+		// Use the smaller of the two timeouts, but only if deadline is positive
+		if timeUntilDeadline > 0 && (maxElapsedTime == 0 || timeUntilDeadline < maxElapsedTime) {
+			maxElapsedTime = timeUntilDeadline
+		}
+	}
+
+	return []backoff.RetryOption{
+		backoff.WithBackOff(eb),
+		backoff.WithMaxElapsedTime(maxElapsedTime),
+	}
+}
+
+// WaitUntil retries a no-result operation until it succeeds, a permanent
+// error is returned, or the retry options elapse. It adapts the operation to
+// the generic backoff.Retry API.
 func WaitUntil(
 	ctx context.Context,
 	backoffSettings *config.BackOff,
-	operation backoff.Operation,
+	operation func() error,
 ) error {
-	backoffWithContext := Context(ctx, backoffSettings)
+	retryOpts := RetryOptions(ctx, backoffSettings)
+	_, err := backoff.Retry(ctx, func() (struct{}, error) {
+		return struct{}{}, operation()
+	}, retryOpts...)
 
-	return backoff.Retry(operation, backoffWithContext)
+	return err
 }
 
 // WaitUntilWithData Implementation of backoff operations that increases the back off period for each retry
@@ -63,21 +101,7 @@ func WaitUntil(
 func WaitUntilWithData[T any](
 	ctx context.Context,
 	backoffSettings *config.BackOff,
-	operation backoff.OperationWithData[T],
+	operation backoff.Operation[T],
 ) (T, error) {
-	backoffWithContext := Context(ctx, backoffSettings)
-
-	return backoff.RetryWithData(operation, backoffWithContext)
-}
-
-//nolint:ireturn // must return an interface
-func Context(ctx context.Context, backoffSettings *config.BackOff) backoff.BackOffContext {
-	eb := backoff.NewExponentialBackOff()
-	eb.InitialInterval = backoffSettings.InitialInterval
-	eb.MaxInterval = backoffSettings.MaxInterval
-	eb.MaxElapsedTime = backoffSettings.MaxElapsedTime
-	eb.RandomizationFactor = backoffSettings.RandomizationFactor
-	eb.Multiplier = backoffSettings.Multiplier
-
-	return backoff.WithContext(eb, ctx)
+	return backoff.Retry[T](ctx, operation, RetryOptions(ctx, backoffSettings)...)
 }
diff --git a/internal/backoff/backoff_test.go b/internal/backoff/backoff_test.go
index 60cbc75a9..e663df907 100644
--- a/internal/backoff/backoff_test.go
+++ b/internal/backoff/backoff_test.go
@@ -11,7 +11,6 @@ import (
 	"testing"
 	"time"
 
-	"github.com/cenkalti/backoff/v4"
 	"github.com/nginx/agent/v3/internal/config"
 	"github.com/stretchr/testify/assert"
 )
@@ -21,7 +20,7 @@ func TestWaitUntil(t *testing.T) {
 	invocations := 0
 	tests := []struct {
 		context         context.Context
-		operation       backoff.Operation
+		operation       func() error
 		name            string
 		initialInterval time.Duration
 		maxInterval     time.Duration
@@ -106,7 +105,7 @@ func TestWaitUntilWithData(t *testing.T) {
 	invocations := -1
 	tests := []struct {
 		context         context.Context
-		operation       backoff.OperationWithData[int]
+		operation       func() (int, error)
 		name            string
 		initialInterval time.Duration
 		maxInterval     time.Duration
@@ -194,8 +193,6 @@ func TestContext(t *testing.T) {
 		RandomizationFactor: config.DefBackoffRandomizationFactor,
 		Multiplier:          config.DefBackoffMultiplier,
 	}
-
-	backoffCtx := Context(context.Background(), settings)
-
+	backoffCtx := RetryOptions(context.Background(), settings)
 	assert.NotEmpty(t, backoffCtx)
 }
diff --git a/internal/command/command_service.go b/internal/command/command_service.go
index edf36f755..99cd3b63c 100644
--- a/internal/command/command_service.go
+++ b/internal/command/command_service.go
@@ -13,7 +13,7 @@ import (
 	"sync"
 	"sync/atomic"
 
-	"github.com/cenkalti/backoff/v4"
+	"github.com/cenkalti/backoff/v7"
 
 	mpi "github.com/nginx/agent/v3/api/grpc/mpi/v1"
 	"github.com/nginx/agent/v3/internal/config"
@@ -116,9 +116,10 @@ func (cs *CommandService) UpdateDataPlaneStatus(
 		return response, nil
 	}
 
-	response, err := backoff.RetryWithData(
+	response, err := backoff.Retry(
+		backOffCtx,
 		sendDataPlaneStatus,
-		backoffHelpers.Context(backOffCtx, cfg.Client.Backoff),
+		backoffHelpers.RetryOptions(backOffCtx, cfg.Client.Backoff)...,
 	)
 	if err != nil {
 		return err
@@ -152,9 +153,10 @@ func (cs *CommandService) UpdateDataPlaneHealth(ctx context.Context, instanceHea
 	backOffCtx, backoffCancel := context.WithTimeout(ctx, cfg.Client.Backoff.MaxElapsedTime)
 	defer backoffCancel()
 
-	response, err := backoff.RetryWithData(
+	response, err := backoff.Retry(
+		backOffCtx,
 		cs.dataPlaneHealthCallback(ctx, request),
-		backoffHelpers.Context(backOffCtx, cfg.Client.Backoff),
+		backoffHelpers.RetryOptions(backOffCtx, cfg.Client.Backoff)...,
 	)
 	if err != nil {
 		return err
@@ -167,7 +169,6 @@ func (cs *CommandService) UpdateDataPlaneHealth(ctx context.Context, instanceHea
 
 func (cs *CommandService) SendDataPlaneResponse(ctx context.Context, response *mpi.DataPlaneResponse) error {
 	slog.DebugContext(ctx, "Sending data plane response", "response", response)
-
 	cfg := cs.config()
 	backOffCtx, backoffCancel := context.WithTimeout(ctx, cfg.Client.Backoff.MaxElapsedTime)
 	defer backoffCancel()
@@ -177,9 +178,10 @@ func (cs *CommandService) SendDataPlaneResponse(ctx context.Context, response *m
 		return err
 	}
 
-	return backoff.Retry(
+	return backoffHelpers.WaitUntil(
+		backOffCtx,
+		cfg.Client.Backoff,
 		cs.sendDataPlaneResponseCallback(ctx, response),
-		backoffHelpers.Context(backOffCtx, cfg.Client.Backoff),
 	)
 }
 
@@ -209,7 +211,7 @@ func (cs *CommandService) Subscribe(ctx context.Context) {
 		case <-ctx.Done():
 			return
 		default:
-			retryError := backoff.Retry(cs.receiveCallback(ctx), backoffHelpers.Context(ctx, commonSettings))
+			retryError := backoffHelpers.WaitUntil(ctx, commonSettings, cs.receiveCallback(ctx))
 			if retryError != nil {
 				slog.WarnContext(ctx, "Failed to receive messages from subscribe stream", "error", retryError)
 			}
@@ -281,9 +283,10 @@ func (cs *CommandService) createConnectionCall(ctx context.Context) (*mpi.Create
 	}
 
 	slog.DebugContext(ctx, "Sending create connection request", "request", request)
-	resp, err := backoff.RetryWithData(
+	resp, err := backoff.Retry(
+		ctx,
 		cs.connectCallback(ctx, request),
-		backoffHelpers.Context(ctx, commonSettings),
+		backoffHelpers.RetryOptions(ctx, commonSettings)...,
 	)
 	if err != nil {
 		cs.isConnected.Store(false)
@@ -378,12 +381,12 @@ func (cs *CommandService) handleConfigApplyResponse(
 		}
 
 		slog.DebugContext(ctx, "Sending data plane response for queued config apply request", "response", newResponse)
-
 		backOffCtx, backoffCancel := context.WithTimeout(ctx, cfg.Client.Backoff.MaxElapsedTime)
 
-		err := backoff.Retry(
+		err := backoffHelpers.WaitUntil(
+			backOffCtx,
+			cfg.Client.Backoff,
 			cs.sendDataPlaneResponseCallback(ctx, newResponse),
-			backoffHelpers.Context(backOffCtx, cfg.Client.Backoff),
 		)
 		backoffCancel()
 
diff --git a/internal/file/file_service_operator.go b/internal/file/file_service_operator.go
index c2c1717a9..de04bc3ab 100644
--- a/internal/file/file_service_operator.go
+++ b/internal/file/file_service_operator.go
@@ -19,7 +19,7 @@ import (
 	"sync"
 	"sync/atomic"
 
-	"github.com/cenkalti/backoff/v4"
+	"github.com/cenkalti/backoff/v7"
 	mpi "github.com/nginx/agent/v3/api/grpc/mpi/v1"
 	backoffHelpers "github.com/nginx/agent/v3/internal/backoff"
 	"github.com/nginx/agent/v3/internal/config"
@@ -105,9 +105,10 @@ func (fso *FileServiceOperator) File(
 		return response, nil
 	}
 
-	getFileResp, getFileErr := backoff.RetryWithData(
+	getFileResp, getFileErr := backoff.Retry(
+		backOffCtx,
 		getFile,
-		backoffHelpers.Context(backOffCtx, fso.agentConfig.Client.Backoff),
+		backoffHelpers.RetryOptions(backOffCtx, fso.agentConfig.Client.Backoff)...,
 	)
 
 	if getFileErr != nil {
@@ -215,9 +216,10 @@ func (fso *FileServiceOperator) UpdateOverview(
 		return response, nil
 	}
 
-	response, err := backoff.RetryWithData(
+	response, err := backoff.Retry(
+		newCtx,
 		sendUpdateOverview,
-		backoffHelpers.Context(newCtx, backoffSettings),
+		backoffHelpers.RetryOptions(newCtx, backoffSettings)...,
 	)
 	if err != nil {
 		return err
@@ -399,7 +401,6 @@ func (fso *FileServiceOperator) sendUpdateFileRequest(
 		},
 		MessageMeta: messageMeta,
 	}
-
 	backOffCtx, backoffCancel := context.WithTimeout(ctx, fso.agentConfig.Client.Backoff.MaxElapsedTime)
 	defer backoffCancel()
 
@@ -431,9 +432,10 @@ func (fso *FileServiceOperator) sendUpdateFileRequest(
 		return response, nil
 	}
 
-	response, err := backoff.RetryWithData(
+	response, err := backoff.Retry(
+		backOffCtx,
 		sendUpdateFile,
-		backoffHelpers.Context(backOffCtx, fso.agentConfig.Client.Backoff),
+		backoffHelpers.RetryOptions(backOffCtx, fso.agentConfig.Client.Backoff)...,
 	)
 	if err != nil {
 		return err
@@ -522,7 +524,7 @@ func (fso *FileServiceOperator) sendUpdateFileStreamHeader(
 		return nil
 	}
 
-	return backoff.Retry(sendUpdateFileHeader, backoffHelpers.Context(backOffCtx, fso.agentConfig.Client.Backoff))
+	return backoffHelpers.WaitUntil(backOffCtx, fso.agentConfig.Client.Backoff, sendUpdateFileHeader)
 }
 
 func (fso *FileServiceOperator) sendFileUpdateStreamChunks(
@@ -616,7 +618,7 @@ func (fso *FileServiceOperator) sendFileUpdateStreamChunk(
 		return nil
 	}
 
-	return backoff.Retry(sendUpdateFileChunk, backoffHelpers.Context(backOffCtx, fso.agentConfig.Client.Backoff))
+	return backoffHelpers.WaitUntil(backOffCtx, fso.agentConfig.Client.Backoff, sendUpdateFileChunk)
 }
 
 func (fso *FileServiceOperator) setupIdentifiers(ctx context.Context, iteration int) (context.Context, string) {
diff --git a/internal/file/file_service_operator_test.go b/internal/file/file_service_operator_test.go
index 3d635f778..f1dd4eeb7 100644
--- a/internal/file/file_service_operator_test.go
+++ b/internal/file/file_service_operator_test.go
@@ -14,6 +14,7 @@ import (
 	"testing"
 	"time"
 
+	"github.com/cenkalti/backoff/v7"
 	mpi "github.com/nginx/agent/v3/api/grpc/mpi/v1"
 	"github.com/nginx/agent/v3/api/grpc/mpi/v1/v1fakes"
 	"github.com/nginx/agent/v3/pkg/files"
@@ -127,7 +128,7 @@ func TestFileServiceOperator_UpdateOverview_NoConnection(t *testing.T) {
 		},
 	}, filePath, 0)
 
-	assert.ErrorIs(t, err, context.DeadlineExceeded)
+	assert.ErrorIs(t, err, backoff.ErrMaxElapsedTime)
 }
 
 func TestFileManagerService_UpdateFile(t *testing.T) {
diff --git a/internal/grpc/grpc.go b/internal/grpc/grpc.go
index 50990651c..eff2a5cde 100644
--- a/internal/grpc/grpc.go
+++ b/internal/grpc/grpc.go
@@ -20,7 +20,7 @@ import (
 
 	"github.com/nginx/agent/v3/internal/datasource/file"
 
-	"github.com/cenkalti/backoff/v4"
+	"github.com/cenkalti/backoff/v7"
 	grpcRetry "github.com/grpc-ecosystem/go-grpc-middleware/v2/interceptors/retry"
 
 	"buf.build/go/protovalidate"
diff --git a/internal/grpc/grpc_test.go b/internal/grpc/grpc_test.go
index 1308e885b..33278f95b 100644
--- a/internal/grpc/grpc_test.go
+++ b/internal/grpc/grpc_test.go
@@ -13,7 +13,7 @@ import (
 	"fmt"
 	"testing"
 
-	"github.com/cenkalti/backoff/v4"
+	"github.com/cenkalti/backoff/v7"
 	"github.com/nginx/agent/v3/test/stub"
 	"google.golang.org/grpc"
 	"google.golang.org/grpc/codes"
@@ -391,7 +391,7 @@ func Test_ValidateGrpcError(t *testing.T) {
 		require.ErrorIs(t, TestError{}, result)
 	}
 	result = ValidateGrpcError(status.Errorf(codes.InvalidArgument, "error"))
-	require.ErrorIs(t, &backoff.PermanentError{}, result)
+	require.ErrorIs(t, result, backoff.ErrPermanent)
 }
 
 func Test_transportCredentials(t *testing.T) {
diff --git a/internal/nginx/nginx_instance_operator.go b/internal/nginx/nginx_instance_operator.go
index e85f743c1..bcb1aac42 100644
--- a/internal/nginx/nginx_instance_operator.go
+++ b/internal/nginx/nginx_instance_operator.go
@@ -14,7 +14,8 @@ import (
 	"path/filepath"
 	"time"
 
-	"github.com/nginx/agent/v3/internal/backoff"
+	"github.com/cenkalti/backoff/v7"
+	backoffHelpers "github.com/nginx/agent/v3/internal/backoff"
 	"github.com/nginx/agent/v3/pkg/nginxprocess"
 
 	"github.com/nginx/agent/v3/pkg/host/exec"
@@ -146,7 +147,7 @@ func (i *NginxInstanceOperator) checkWorkers(ctx context.Context, instanceID str
 	slog.DebugContext(ctx, "Found parent process ID, checking NGINX worker processes have reloaded",
 		"process_id", newPid)
 
-	err := backoff.WaitUntil(ctx, backoffSettings, func() error {
+	err := backoffHelpers.WaitUntil(ctx, backoffSettings, func() error {
 		currentWorkers := i.nginxProcessOperator.NginxWorkerProcesses(ctx, newPid)
 		if len(currentWorkers) == 0 {
 			return errors.New("waiting for NGINX worker processes")
@@ -160,6 +161,10 @@ func (i *NginxInstanceOperator) checkWorkers(ctx context.Context, instanceID str
 
 		return fmt.Errorf("waiting for NGINX worker to be newer than %v", createdTime)
 	})
+
+	if re := backoff.AsRetryError(err); re != nil {
+		err = re.LastErr
+	}
 	if err != nil {
 		slog.WarnContext(
 			ctx,
diff --git a/test/mock/grpc/mock_management_file_service.go b/test/mock/grpc/mock_management_file_service.go
index 14f686f21..f05a298ed 100644
--- a/test/mock/grpc/mock_management_file_service.go
+++ b/test/mock/grpc/mock_management_file_service.go
@@ -18,7 +18,6 @@ import (
 
 	"github.com/nginx/agent/v3/pkg/files"
 
-	"github.com/cenkalti/backoff/v4"
 	backoffHelpers "github.com/nginx/agent/v3/internal/backoff"
 	"github.com/nginx/agent/v3/internal/config"
 	internalgrpc "github.com/nginx/agent/v3/internal/grpc"
@@ -347,7 +346,7 @@ func (mgs *FileService) sendGetFileStreamHeader(ctx context.Context,
 		return nil
 	}
 
-	return backoff.Retry(sendGetFileHeader, backoffHelpers.Context(backOffCtx, mgs.agentConfig.Client.Backoff))
+	return backoffHelpers.WaitUntil(backOffCtx, mgs.agentConfig.Client.Backoff, sendGetFileHeader)
 }
 
 func (mgs *FileService) sendGetFileStreamChunk(ctx context.Context, chunk v1.FileDataChunk_Content,
@@ -380,7 +379,7 @@ func (mgs *FileService) sendGetFileStreamChunk(ctx context.Context, chunk v1.Fil
 		return nil
 	}
 
-	return backoff.Retry(sendGetFileChunk, backoffHelpers.Context(backOffCtx, mgs.agentConfig.Client.Backoff))
+	return backoffHelpers.WaitUntil(backOffCtx, mgs.agentConfig.Client.Backoff, sendGetFileChunk)
 }
 
 func readChunk(