diff --git a/internal/controllers/clusterextension_controller.go b/internal/controllers/clusterextension_controller.go
index 76ebd3932..c9c09aa6e 100644
--- a/internal/controllers/clusterextension_controller.go
+++ b/internal/controllers/clusterextension_controller.go
@@ -113,29 +113,28 @@ func (r *ClusterExtensionReconciler) Reconcile(ctx context.Context, req ctrl.Req
 	reconciledExt := existingExt.DeepCopy()
 	res, reconcileErr := r.reconcile(ctx, reconciledExt)
 
-	// Do checks before any Update()s, as Update() may modify the resource structure!
-	updateStatus := !equality.Semantic.DeepEqual(existingExt.Status, reconciledExt.Status)
-	updateFinalizers := !equality.Semantic.DeepEqual(existingExt.Finalizers, reconciledExt.Finalizers)
-
 	// If any unexpected fields have changed, panic before updating the resource
 	unexpectedFieldsChanged := checkForUnexpectedFieldChange(*existingExt, *reconciledExt)
 	if unexpectedFieldsChanged {
 		panic("spec or metadata changed by reconciler")
 	}
 
-	// Save the finalizers off to the side. If we update the status, the reconciledExt will be updated
-	// to contain the new state of the ClusterExtension, which contains the status update, but (critically)
-	// does not contain the finalizers. After the status update, we need to re-add the finalizers to the
-	// reconciledExt before updating the object.
-	finalizers := reconciledExt.Finalizers
-	if updateStatus {
+	// Re-fetch the object to get the latest resource version
+	// This is necessary because the object may have been updated by another controller
+	// between the time we fetched it and the time we finished reconciling it
+	if err := r.Client.Get(ctx, req.NamespacedName, existingExt); err != nil {
+		return ctrl.Result{}, client.IgnoreNotFound(err)
+	}
+	if !equality.Semantic.DeepEqual(existingExt.Status, reconciledExt.Status) {
 		if err := r.Client.Status().Update(ctx, reconciledExt); err != nil {
 			reconcileErr = errors.Join(reconcileErr, fmt.Errorf("error updating status: %v", err))
 		}
 	}
-	reconciledExt.Finalizers = finalizers
 
-	if updateFinalizers {
+	if err := r.Client.Get(ctx, req.NamespacedName, existingExt); err != nil {
+		return ctrl.Result{}, client.IgnoreNotFound(err)
+	}
+	if !equality.Semantic.DeepEqual(existingExt.Finalizers, reconciledExt.Finalizers) {
 		if err := r.Client.Update(ctx, reconciledExt); err != nil {
 			reconcileErr = errors.Join(reconcileErr, fmt.Errorf("error updating finalizers: %v", err))
 		}