diff --git a/edb/schema/expraliases.py b/edb/schema/expraliases.py
index a4e781449f7..4a913b20d09 100644
--- a/edb/schema/expraliases.py
+++ b/edb/schema/expraliases.py
@@ -563,8 +563,17 @@ def _create_alias_types(
         if op.classname == classname:
             type_cmd = op
             break
-    assert type_cmd
-
+    if not type_cmd:
+        # create type command does not exist, because the type already exists
+        # (this happens when converting a type into an alias)
+        ty = schema.get(classname, type=s_types.Type)
+        assert ty
+        type_cmd = ty.init_delta_command(schema, sd.AlterObject)
+        type_cmd.canonical = True
+        type_cmd.set_attribute_value('alias_is_persistent', True)
+        type_cmd.set_attribute_value('expr_type', s_types.ExprType.Select)
+        type_cmd.set_attribute_value('from_alias', True)
+        type_cmd.set_attribute_value('from_global', is_global)
     type_cmd.set_attribute_value('expr', expr)
 
     result = sd.CommandGroup()
diff --git a/tests/test_edgeql_ddl.py b/tests/test_edgeql_ddl.py
index 1ae81a9da9c..65dd77ebb0b 100644
--- a/tests/test_edgeql_ddl.py
+++ b/tests/test_edgeql_ddl.py
@@ -9878,13 +9878,12 @@ async def test_edgeql_ddl_alias_12(self):
             await self.con.execute(r"""
                 create alias X := 2;
             """)
-        async with self.assertRaisesRegexTx(
-            edgedb.SchemaError,
-            "type 'default::Y' already exists"
-        ):
-            await self.con.execute(r"""
-                create alias Y := 2;
-            """)
+
+        # this is allowed: it converts the type into an alias
+        await self.con.execute(r"""
+            create alias Y := 2;
+        """)
+
         async with self.assertRaisesRegexTx(
             edgedb.SchemaError,
             "global 'default::Z' already exists"