diff --git a/homeassistant/components/shelly/__init__.py b/homeassistant/components/shelly/__init__.py
index 6b8d100ea8faaa..142b5f9c521b40 100644
--- a/homeassistant/components/shelly/__init__.py
+++ b/homeassistant/components/shelly/__init__.py
@@ -9,6 +9,7 @@
 from aioshelly.const import RPC_GENERATIONS
 from aioshelly.exceptions import (
     DeviceConnectionError,
+    FirmwareUnsupported,
     InvalidAuthError,
     MacAddressMismatchError,
 )
@@ -37,6 +38,7 @@
     DATA_CONFIG_ENTRY,
     DEFAULT_COAP_PORT,
     DOMAIN,
+    FIRMWARE_UNSUPPORTED_ISSUE_ID,
     LOGGER,
     MODELS_WITH_WRONG_SLEEP_PERIOD,
     PUSH_UPDATE_ISSUE_ID,
@@ -50,6 +52,7 @@
     get_entry_data,
 )
 from .utils import (
+    async_create_issue_unsupported_firmware,
     get_block_device_sleep_period,
     get_coap_context,
     get_device_entry_gen,
@@ -216,6 +219,9 @@ def _async_device_online(_: Any, update_type: BlockUpdateType) -> None:
             raise ConfigEntryNotReady(repr(err)) from err
         except InvalidAuthError as err:
             raise ConfigEntryAuthFailed(repr(err)) from err
+        except FirmwareUnsupported as err:
+            async_create_issue_unsupported_firmware(hass, entry)
+            raise ConfigEntryNotReady from err
 
         await _async_block_device_setup()
     elif sleep_period is None or device_entry is None:
@@ -230,6 +236,9 @@ def _async_device_online(_: Any, update_type: BlockUpdateType) -> None:
         LOGGER.debug("Setting up offline block device %s", entry.title)
         await _async_block_device_setup()
 
+    ir.async_delete_issue(
+        hass, DOMAIN, FIRMWARE_UNSUPPORTED_ISSUE_ID.format(unique=entry.unique_id)
+    )
     return True
 
 
@@ -296,6 +305,9 @@ def _async_device_online(_: Any, update_type: RpcUpdateType) -> None:
         LOGGER.debug("Setting up online RPC device %s", entry.title)
         try:
             await device.initialize()
+        except FirmwareUnsupported as err:
+            async_create_issue_unsupported_firmware(hass, entry)
+            raise ConfigEntryNotReady from err
         except (DeviceConnectionError, MacAddressMismatchError) as err:
             raise ConfigEntryNotReady(repr(err)) from err
         except InvalidAuthError as err:
@@ -314,6 +326,9 @@ def _async_device_online(_: Any, update_type: RpcUpdateType) -> None:
         LOGGER.debug("Setting up offline block device %s", entry.title)
         await _async_rpc_device_setup()
 
+    ir.async_delete_issue(
+        hass, DOMAIN, FIRMWARE_UNSUPPORTED_ISSUE_ID.format(unique=entry.unique_id)
+    )
     return True
 
 
diff --git a/homeassistant/components/shelly/const.py b/homeassistant/components/shelly/const.py
index 6cc513015d382a..827a6c00a30e9f 100644
--- a/homeassistant/components/shelly/const.py
+++ b/homeassistant/components/shelly/const.py
@@ -212,6 +212,8 @@ class BLEScannerMode(StrEnum):
 
 NOT_CALIBRATED_ISSUE_ID = "not_calibrated_{unique}"
 
+FIRMWARE_UNSUPPORTED_ISSUE_ID = "firmware_unsupported_{unique}"
+
 GAS_VALVE_OPEN_STATES = ("opening", "opened")
 
 OTA_BEGIN = "ota_begin"
diff --git a/homeassistant/components/shelly/strings.json b/homeassistant/components/shelly/strings.json
index c1f9b799444dfb..9676c24f8830ca 100644
--- a/homeassistant/components/shelly/strings.json
+++ b/homeassistant/components/shelly/strings.json
@@ -168,6 +168,10 @@
     "deprecated_valve_switch_entity": {
       "title": "Deprecated switch entity for Shelly Gas Valve detected in {info}",
       "description": "Your Shelly Gas Valve entity `{entity}` is being used in `{info}`. A valve entity is available and should be used going forward.\n\nPlease adjust `{info}` to fix this issue."
+    },
+    "unsupported_firmware": {
+      "title": "Unsupported firmware for device {device_name}",
+      "description": "Your Shelly device {device_name} with IP address {ip_address} is running an unsupported firmware. Please update the firmware.\n\nIf the device does not offer an update, check internet connectivity (gateway, DNS, time) and restart the device."
     }
   }
 }
diff --git a/homeassistant/components/shelly/utils.py b/homeassistant/components/shelly/utils.py
index d40b22ca50a4fa..f5196504fe605c 100644
--- a/homeassistant/components/shelly/utils.py
+++ b/homeassistant/components/shelly/utils.py
@@ -22,7 +22,7 @@
 from homeassistant.config_entries import ConfigEntry
 from homeassistant.const import EVENT_HOMEASSISTANT_STOP
 from homeassistant.core import Event, HomeAssistant, callback
-from homeassistant.helpers import singleton
+from homeassistant.helpers import issue_registry as ir, singleton
 from homeassistant.helpers.device_registry import (
     CONNECTION_NETWORK_MAC,
     async_get as dr_async_get,
@@ -38,6 +38,7 @@
     DEFAULT_COAP_PORT,
     DEVICES_WITHOUT_FIRMWARE_CHANGELOG,
     DOMAIN,
+    FIRMWARE_UNSUPPORTED_ISSUE_ID,
     GEN1_RELEASE_URL,
     GEN2_RELEASE_URL,
     LOGGER,
@@ -426,3 +427,23 @@ def get_release_url(gen: int, model: str, beta: bool) -> str | None:
         return None
 
     return GEN1_RELEASE_URL if gen in BLOCK_GENERATIONS else GEN2_RELEASE_URL
+
+
+@callback
+def async_create_issue_unsupported_firmware(
+    hass: HomeAssistant, entry: ConfigEntry
+) -> None:
+    """Create a repair issue if the device runs an unsupported firmware."""
+    ir.async_create_issue(
+        hass,
+        DOMAIN,
+        FIRMWARE_UNSUPPORTED_ISSUE_ID.format(unique=entry.unique_id),
+        is_fixable=False,
+        is_persistent=False,
+        severity=ir.IssueSeverity.ERROR,
+        translation_key="unsupported_firmware",
+        translation_placeholders={
+            "device_name": entry.title,
+            "ip_address": entry.data["host"],
+        },
+    )
diff --git a/tests/components/shelly/test_coordinator.py b/tests/components/shelly/test_coordinator.py
index 8e288ba16874cf..f17d8491782dd2 100644
--- a/tests/components/shelly/test_coordinator.py
+++ b/tests/components/shelly/test_coordinator.py
@@ -3,7 +3,11 @@
 from unittest.mock import AsyncMock, patch
 
 from aioshelly.const import MODEL_BULB, MODEL_BUTTON1
-from aioshelly.exceptions import DeviceConnectionError, InvalidAuthError
+from aioshelly.exceptions import (
+    DeviceConnectionError,
+    FirmwareUnsupported,
+    InvalidAuthError,
+)
 from freezegun.api import FrozenDateTimeFactory
 
 from homeassistant.components.binary_sensor import DOMAIN as BINARY_SENSOR_DOMAIN
@@ -186,6 +190,27 @@ async def test_block_rest_update_auth_error(
     assert flow["context"].get("entry_id") == entry.entry_id
 
 
+async def test_block_firmware_unsupported(
+    hass: HomeAssistant, freezer: FrozenDateTimeFactory, mock_block_device, monkeypatch
+) -> None:
+    """Test block device polling authentication error."""
+    monkeypatch.setattr(
+        mock_block_device,
+        "update",
+        AsyncMock(side_effect=FirmwareUnsupported),
+    )
+    entry = await init_integration(hass, 1)
+
+    assert entry.state is ConfigEntryState.LOADED
+
+    # Move time to generate polling
+    freezer.tick(timedelta(seconds=UPDATE_PERIOD_MULTIPLIER * 15))
+    async_fire_time_changed(hass)
+    await hass.async_block_till_done()
+
+    assert entry.state is ConfigEntryState.LOADED
+
+
 async def test_block_polling_connection_error(
     hass: HomeAssistant, freezer: FrozenDateTimeFactory, mock_block_device, monkeypatch
 ) -> None:
@@ -504,7 +529,28 @@ async def test_rpc_sleeping_device_no_periodic_updates(
     async_fire_time_changed(hass)
     await hass.async_block_till_done()
 
-    assert get_entity_state(hass, entity_id) == STATE_UNAVAILABLE
+    assert get_entity_state(hass, entity_id) is STATE_UNAVAILABLE
+
+
+async def test_rpc_firmware_unsupported(
+    hass: HomeAssistant, freezer: FrozenDateTimeFactory, mock_rpc_device, monkeypatch
+) -> None:
+    """Test RPC update entry unsupported firmware."""
+    entry = await init_integration(hass, 2)
+    register_entity(
+        hass,
+        SENSOR_DOMAIN,
+        "test_name_temperature",
+        "temperature:0-temperature_0",
+        entry,
+    )
+
+    # Move time to generate sleep period update
+    freezer.tick(timedelta(seconds=600 * SLEEP_PERIOD_MULTIPLIER))
+    async_fire_time_changed(hass)
+    await hass.async_block_till_done()
+
+    assert entry.state is ConfigEntryState.LOADED
 
 
 async def test_rpc_reconnect_auth_error(
diff --git a/tests/components/shelly/test_init.py b/tests/components/shelly/test_init.py
index bc0ba045a552a2..0cd206e33a2b3a 100644
--- a/tests/components/shelly/test_init.py
+++ b/tests/components/shelly/test_init.py
@@ -5,6 +5,7 @@
 
 from aioshelly.exceptions import (
     DeviceConnectionError,
+    FirmwareUnsupported,
     InvalidAuthError,
     MacAddressMismatchError,
 )
@@ -79,15 +80,21 @@ async def test_setup_entry_not_shelly(
 
 
 @pytest.mark.parametrize("gen", [1, 2, 3])
+@pytest.mark.parametrize("side_effect", [DeviceConnectionError, FirmwareUnsupported])
 async def test_device_connection_error(
-    hass: HomeAssistant, gen, mock_block_device, mock_rpc_device, monkeypatch
+    hass: HomeAssistant,
+    gen,
+    side_effect,
+    mock_block_device,
+    mock_rpc_device,
+    monkeypatch,
 ) -> None:
     """Test device connection error."""
     monkeypatch.setattr(
-        mock_block_device, "initialize", AsyncMock(side_effect=DeviceConnectionError)
+        mock_block_device, "initialize", AsyncMock(side_effect=side_effect)
     )
     monkeypatch.setattr(
-        mock_rpc_device, "initialize", AsyncMock(side_effect=DeviceConnectionError)
+        mock_rpc_device, "initialize", AsyncMock(side_effect=side_effect)
     )
 
     entry = await init_integration(hass, gen)