diff --git a/CHANGELOG.md b/CHANGELOG.md
index b7d8edb7f..370ccc310 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -2,6 +2,21 @@
 
 All notable changes to this project are documented in this file.
 
+## 0.25.8
+
+**Release date:** 2022-06-24
+
+This prerelease fixes an authentication issue when using libgit2 managed
+transport to checkout repos on BitBucket server.
+
+Fixes:
+- set request auth if both username and password are non empty
+  [#794](https://github.com/fluxcd/source-controller/pull/794)
+
+Improvements:
+- libgit2/managed/http: test for incomplete creds
+  [#796](https://github.com/fluxcd/source-controller/pull/796)
+
 ## 0.25.7
 
 **Release date:** 2022-06-22
diff --git a/config/manager/kustomization.yaml b/config/manager/kustomization.yaml
index 365052283..4aa46dd3a 100644
--- a/config/manager/kustomization.yaml
+++ b/config/manager/kustomization.yaml
@@ -6,4 +6,4 @@ resources:
 images:
 - name: fluxcd/source-controller
   newName: fluxcd/source-controller
-  newTag: v0.25.7
+  newTag: v0.25.8
diff --git a/go.mod b/go.mod
index 8b267c576..a3bbda4eb 100644
--- a/go.mod
+++ b/go.mod
@@ -32,7 +32,7 @@ require (
 	github.com/fluxcd/pkg/testserver v0.2.0
 	github.com/fluxcd/pkg/untar v0.1.0
 	github.com/fluxcd/pkg/version v0.1.0
-	github.com/fluxcd/source-controller/api v0.25.7
+	github.com/fluxcd/source-controller/api v0.25.8
 	github.com/go-git/go-billy/v5 v5.3.1
 	github.com/go-git/go-git/v5 v5.4.2
 	github.com/go-logr/logr v1.2.3