diff --git a/VERSION b/VERSION
index 23aa83906..0495c4a88 100644
--- a/VERSION
+++ b/VERSION
@@ -1 +1 @@
-1.2.2
+1.2.3
diff --git a/config/components/manager-image/kustomization.yaml b/config/components/manager-image/kustomization.yaml
index c2930b287..69f2e0320 100644
--- a/config/components/manager-image/kustomization.yaml
+++ b/config/components/manager-image/kustomization.yaml
@@ -4,4 +4,4 @@ kind: Component
 images:
 - name: docker.io/kong/gateway-operator-oss
   newName: docker.io/kong/gateway-operator-oss
-  newTag: 1.2.2
+  newTag: 1.2.3