diff --git a/diskimage_builder/elements/gentoo/finalise.d/99-cleanup b/diskimage_builder/elements/gentoo/post-install.d/99-cleanup
similarity index 100%
rename from diskimage_builder/elements/gentoo/finalise.d/99-cleanup
rename to diskimage_builder/elements/gentoo/post-install.d/99-cleanup
diff --git a/releasenotes/notes/gentoo-post-install-16514f6d51465c79.yaml b/releasenotes/notes/gentoo-post-install-16514f6d51465c79.yaml
new file mode 100644
index 000000000..b55442648
--- /dev/null
+++ b/releasenotes/notes/gentoo-post-install-16514f6d51465c79.yaml
@@ -0,0 +1,6 @@
+fixes:
+  - |
+    The gentoo element no longer runs finalization actions during finalise
+    phase; these actions now happen in post-install phase. This fixes an issue
+    where the final ``emerge --update @world`` would fail due to limited disk
+    space, due to the environment finalise steps run in.