diff --git a/kas/package/Kconfig b/kas/package/Kconfig
index 35ba7cf1..9c24a680 100644
--- a/kas/package/Kconfig
+++ b/kas/package/Kconfig
@@ -146,6 +146,15 @@ config KAS_INCLUDE_PACKAGE_ISAR_CI_SSH_SETUP
         default "kas/package/pkg_sshd-regen-keys.yaml"
         depends on PACKAGE_ISAR_CI_SSH_SETUP
 
+config PACKAGE_COMPRESS_INITRD
+        bool "compress initrd"
+        default y
+
+config KAS_INCLUDE_PACKAGE_COMPRESS_INITRD
+        string
+        default "kas/package/pkg_compress_initrd.yaml"
+        depends on PACKAGE_COMPRESS_INITRD
+
 endmenu
 
 config KAS_IMAGE_PREINSTALL
diff --git a/kas/package/pkg_compress_initrd.yaml b/kas/package/pkg_compress_initrd.yaml
new file mode 100644
index 00000000..376a280c
--- /dev/null
+++ b/kas/package/pkg_compress_initrd.yaml
@@ -0,0 +1,9 @@
+# This software is a part of ISAR.
+# Copyright (C) 2024 ilbers GmbH
+
+header:
+  version: 14
+
+local_conf_header:
+  package-compress-initrd: |
+    IMAGE_INSTALL:append = " compress-initrd"
diff --git a/meta-isar/recipes-initramfs/compress-initrd/compress-initrd.bb b/meta-isar/recipes-initramfs/compress-initrd/compress-initrd.bb
new file mode 100644
index 00000000..b1a5909b
--- /dev/null
+++ b/meta-isar/recipes-initramfs/compress-initrd/compress-initrd.bb
@@ -0,0 +1,21 @@
+# Sample recipe to configure the desired compression tool
+# during initramfs generation
+#
+# This software is a part of ISAR.
+
+DESCRIPTION = "Compress the initrd with configured compression tool"
+MAINTAINER = "Your name here <you@domain.com>"
+
+inherit dpkg-raw
+
+COMPRESS_TOOL ?= "xz"
+
+DEBIAN_DEPENDS = "linux-image-${KERNEL_NAME}, xz-utils, initramfs-tools"
+
+SRC_URI = " \
+    file://postinst \
+"
+do_install() {
+    install -v -d "${D}/etc/initramfs-tools/conf.d/"
+    echo "COMPRESS=${COMPRESS_TOOL}" > "${D}/etc/initramfs-tools/conf.d/${PN}.conf"
+}
diff --git a/meta-isar/recipes-initramfs/compress-initrd/files/postinst b/meta-isar/recipes-initramfs/compress-initrd/files/postinst
new file mode 100644
index 00000000..0db52142
--- /dev/null
+++ b/meta-isar/recipes-initramfs/compress-initrd/files/postinst
@@ -0,0 +1,5 @@
+#!/bin/sh
+
+set -e
+
+update-initramfs -c -k all