diff --git a/Makefile b/Makefile
index d790713447..cb35d11c78 100644
--- a/Makefile
+++ b/Makefile
@@ -112,4 +112,4 @@ controller-gen: ## Download controller-gen locally if necessary.
 
 KUSTOMIZE = $(shell pwd)/bin/kustomize
 kustomize: ## Download kustomize locally if necessary.
-	GOBIN=$(PROJECT_DIR)/bin go install sigs.k8s.io/kustomize/kustomize/v4@v4.5.7
+	GOBIN=$(PROJECT_DIR)/bin go install sigs.k8s.io/kustomize/kustomize/v5@v5.4.3
diff --git a/manifests/rhoai/kustomization.yaml b/manifests/rhoai/kustomization.yaml
index 702fe6e4e6..46b2525630 100644
--- a/manifests/rhoai/kustomization.yaml
+++ b/manifests/rhoai/kustomization.yaml
@@ -18,19 +18,25 @@ configMapGenerator:
 configurations:
   - params.yaml
 
-vars:
-- name: image
-  objref:
+replacements:
+- source:
     kind: ConfigMap
     name: rhoai-config
-    apiVersion: v1
-  fieldref:
-    fieldpath: data.odh-training-operator-controller-image
+    version: v1
+    fieldPath: data.odh-training-operator-controller-image
+  targets:
+  - select:
+      kind: Deployment
+      name: training-operator
+    fieldPaths:
+    - spec.template.spec.containers.0.image
 
 # Labels to add to all resources and selectors.
-commonLabels:
-  app.kubernetes.io/name: training-operator
-  app.kubernetes.io/component: controller
+labels:
+- includeSelectors: true
+  pairs:
+    app.kubernetes.io/component: controller
+    app.kubernetes.io/name: training-operator
 
 resources:
 - ../base