diff --git a/release/nightly_tests/dask_on_ray/dask_on_ray_app_config.yaml b/release/nightly_tests/dask_on_ray/dask_on_ray_app_config.yaml
index f4098b019262..5f0871723e3a 100644
--- a/release/nightly_tests/dask_on_ray/dask_on_ray_app_config.yaml
+++ b/release/nightly_tests/dask_on_ray/dask_on_ray_app_config.yaml
@@ -1,4 +1,9 @@
 base_image: {{ env["RAY_IMAGE_NIGHTLY_CPU"] | default("anyscale/ray:nightly-py37") }}
+# We use retriable_lifo as the workload can crash due to multiple tasks from different
+# callers running on the same node, we also observed raylet memory leak that would
+# trigger the group-by-policy to fail the workload.
+# https://github.com/ray-project/ray/issues/32195
+env_vars: {"RAY_worker_killing_policy": "retriable_lifo"}
 debian_packages: []
 
 python: