diff --git a/CHANGELOG.md b/CHANGELOG.md
index dd9213a8..fae3180f 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -1,5 +1,24 @@
 # Changelog
 
+## 0.16.0
+
+**Release date:** 2021-10-28
+
+This prerelease finalizes the improvements around the `libgit2` C library.
+Users who noticed a memory increase after upgrading to `v0.15.0` are highly
+encouraged to update to this new version as soon as possible, as this release
+stabilizes it again.
+
+In addition, [support for sprig functions](https://github.com/fluxcd/image-automation-controller/blob/v0.16.0/docs/spec/v1beta1/imageupdateautomations.md#commit-message-with-template-functions)
+has been added in this release; allowing for more complex manipulations and
+transformations of the commit message.
+
+Improvements:
+* Add support for the sprig functions library
+  [#223](https://github.com/fluxcd/image-automation-controller/pull/223)
+* controllers: use new `git` contract
+  [#239](https://github.com/fluxcd/image-automation-controller/pull/239)
+
 ## 0.15.0
 
 **Release date:** 2021-10-08
diff --git a/config/manager/kustomization.yaml b/config/manager/kustomization.yaml
index 652f1751..dde72895 100644
--- a/config/manager/kustomization.yaml
+++ b/config/manager/kustomization.yaml
@@ -5,4 +5,4 @@ resources:
 images:
 - name: fluxcd/image-automation-controller
   newName: fluxcd/image-automation-controller
-  newTag: v0.15.0
+  newTag: v0.16.0
diff --git a/go.mod b/go.mod
index beae3e8d..941cc374 100644
--- a/go.mod
+++ b/go.mod
@@ -8,7 +8,7 @@ require (
 	github.com/Masterminds/sprig/v3 v3.2.2
 	github.com/ProtonMail/go-crypto v0.0.0-20210428141323-04723f9f07d7
 	github.com/cyphar/filepath-securejoin v0.2.2
-	github.com/fluxcd/image-automation-controller/api v0.15.0
+	github.com/fluxcd/image-automation-controller/api v0.16.0
 	// If you bump this, change REFLECTOR_VER in the Makefile to match
 	github.com/fluxcd/image-reflector-controller/api v0.12.0
 	github.com/fluxcd/pkg/apis/meta v0.10.1