diff --git a/meta-digi-containers/README.md b/meta-digi-containers/README.md
index f47c2784d..e28de3543 100644
--- a/meta-digi-containers/README.md
+++ b/meta-digi-containers/README.md
@@ -20,7 +20,7 @@ The `dey-image-container` workflow produces:
 - A base rootfs (`tar.xz`)
 - An OCI image output
 - A Podman archive (`*.tar`)
-- An LXC bundle (`*.tar.xz`)
+- An LXC bundle (`*.tar.gz`)
 - Final container artifacts (`*.tar.gz`) with:
   - `manifest.json`
   - `payload/`
@@ -42,7 +42,7 @@ This script requires:
 - `manifest.json`
 - payload artifact, which may be one of:
   - Podman: `image.tar`
-  - LXC: a Yocto-style LXC bundle (`.tar.xz`) containing `rootfs/` and `config`
+  - LXC: a Yocto-style LXC bundle (`.tar.gz`) containing `rootfs/` and `config`
 
 Usage:
 
diff --git a/meta-digi-containers/recipes-core/images/dey-image-container-lxc.inc b/meta-digi-containers/recipes-core/images/dey-image-container-lxc.inc
index cce78b070..07205b21f 100644
--- a/meta-digi-containers/recipes-core/images/dey-image-container-lxc.inc
+++ b/meta-digi-containers/recipes-core/images/dey-image-container-lxc.inc
@@ -36,7 +36,7 @@ do_image_lxc_bundle() {
         -e "s|@CONTAINER_INIT_SCRIPT@|${CONTAINER_INIT_SCRIPT}|g" \
         "${config_in}" > "${lxc_dir}/config"
 
-    tar -C "${workdir}" -cJf "${lxc_tar}" "${CONTAINER_NAME}"
+    tar -C "${workdir}" -czf "${lxc_tar}" "${CONTAINER_NAME}"
 
     if [ ! -s "${lxc_tar}" ]; then
         bbfatal "LXC bundle was not generated correctly: ${lxc_tar}"
diff --git a/meta-digi-containers/recipes-core/images/dey-image-container.bb b/meta-digi-containers/recipes-core/images/dey-image-container.bb
index cd60f164e..5d259673d 100644
--- a/meta-digi-containers/recipes-core/images/dey-image-container.bb
+++ b/meta-digi-containers/recipes-core/images/dey-image-container.bb
@@ -47,7 +47,7 @@ PODMAN_OUTPUT_NAME ?= "${CONTAINER_NAME}_podman_${MACHINE}.tar"
 ########################
 CONTAINERS_DIR ?= "${THISDIR}/../../containers"
 LXC_FOLDER ?= "/var/lib/lxc"
-LXC_OUTPUT_NAME ?= "${CONTAINER_NAME}_lxc_${MACHINE}.tar.xz"
+LXC_OUTPUT_NAME ?= "${CONTAINER_NAME}_lxc_${MACHINE}.tar.gz"
 LXC_CONFIG_DIR ?= "${CONTAINER_PROFILE_DIR}/configs_lxc"
 LXC_CONFIG_FILE ?= "${LXC_CONFIG_DIR}/config_lxc_${MACHINE}"
 
diff --git a/meta-digi-containers/scripts/generate-dcp.py b/meta-digi-containers/scripts/generate-dcp.py
index 999a8d1b7..e073cfb2c 100755
--- a/meta-digi-containers/scripts/generate-dcp.py
+++ b/meta-digi-containers/scripts/generate-dcp.py
@@ -146,8 +146,8 @@ def validate_payload(path: Path, runtime: str) -> None:
         if not lowered.endswith(".tar"):
             fail("invalid payload: runtime podman requires a .tar file")
         return
-    if not lowered.endswith(".tar.xz"):
-        fail("invalid payload: runtime lxc requires a .tar.xz file")
+    if not lowered.endswith(".tar.gz"):
+        fail("invalid payload: runtime lxc requires a .tar.gz file")
 
 
 def tar_mode_for_path(path: Path, *, writing: bool = False) -> str:
@@ -188,8 +188,6 @@ def ensure_lxc_layout(payload: Path) -> tuple[str, str]:
             return dirs[0].name, dirs[0].name
 
     fail("invalid payload: LXC archive must contain rootfs/ and config")
-
-
 def write_default_readme(path: Path, manifest: dict, *, created_at: str, payload_name: str) -> None:
     content = (
         f"Package: {manifest['package_id']}\n"