diff --git a/drivers/timer/nrf_grtc_timer.c b/drivers/timer/nrf_grtc_timer.c
index f9a43a1d154..6f7e14670b3 100644
--- a/drivers/timer/nrf_grtc_timer.c
+++ b/drivers/timer/nrf_grtc_timer.c
@@ -423,7 +423,7 @@ int z_nrf_grtc_wakeup_prepare(uint64_t wake_time_us)
 		nrfy_grtc_timeout_get(NRF_GRTC) * CONFIG_SYS_CLOCK_HW_CYCLES_PER_SEC / 32768 +
 		MAX_CC_LATCH_WAIT_TIME_US;
 	k_busy_wait(wait_time);
-#if NRF_GRTC_HAS_CLKSEL
+#if DT_NODE_HAS_STATUS(DT_NODELABEL(lfxo), okay) && NRF_GRTC_HAS_CLKSEL
 	nrfx_grtc_clock_source_set(NRF_GRTC_CLKSEL_LFXO);
 #endif
 	k_spin_unlock(&lock, key);
@@ -464,7 +464,7 @@ static int sys_clock_driver_init(void)
 
 #if defined(CONFIG_NRF_GRTC_TIMER_CLOCK_MANAGEMENT) &&                                             \
 	(defined(NRF_GRTC_HAS_CLKSEL) && (NRF_GRTC_HAS_CLKSEL == 1))
-	/* Use System LFCLK as the low-frequency clock source. */
+	/* Use System LFCLK as the low-frequency clock source during initialization. */
 	nrfx_grtc_clock_source_set(NRF_GRTC_CLKSEL_LFCLK);
 #endif
 
@@ -504,6 +504,12 @@ static int sys_clock_driver_init(void)
 	z_nrf_clock_control_lf_on(mode);
 #endif
 
+#if defined(CONFIG_NRF_GRTC_TIMER_CLOCK_MANAGEMENT) &&                                             \
+	DT_NODE_HAS_STATUS(DT_NODELABEL(lfxo), okay) && NRF_GRTC_HAS_CLKSEL
+	/* Switch to LFXO as the low-frequency clock source. */
+	nrfx_grtc_clock_source_set(NRF_GRTC_CLKSEL_LFXO);
+#endif
+
 	return 0;
 }