diff --git a/cinder/backup/manager.py b/cinder/backup/manager.py
index 92d482434f3..ec17e4bdcc7 100644
--- a/cinder/backup/manager.py
+++ b/cinder/backup/manager.py
@@ -416,10 +416,15 @@ class BackupManager(manager.SchedulerDependentManager):
                     snapshot.status = fields.SnapshotStatus.AVAILABLE
                     snapshot.save()
                 else:
-                    self.db.volume_update(
-                        context, volume_id,
-                        {'status': previous_status,
-                         'previous_status': 'error_backing-up'})
+                    try:
+                        self.db.volume_update(
+                            context, volume_id,
+                            {'status': previous_status,
+                             'previous_status': 'error_backing-up'})
+                    except exception.VolumeNotFound:
+                        # If the volume was deleted we cannot update its
+                        # status but we still want to set the backup to error.
+                        pass
                 volume_utils.update_backup_error(backup, str(err))
 
     def _start_backup(self, context, backup, volume):
diff --git a/cinder/tests/unit/backup/test_backup.py b/cinder/tests/unit/backup/test_backup.py
index eca450637fb..d63271e73f0 100644
--- a/cinder/tests/unit/backup/test_backup.py
+++ b/cinder/tests/unit/backup/test_backup.py
@@ -673,6 +673,26 @@ class BackupTestCase(BaseBackupTest):
             backup.refresh()
         self.assertEqual(fields.BackupStatus.DELETED, backup.status)
 
+    @mock.patch('cinder.backup.manager.BackupManager._start_backup',
+                side_effect=FakeBackupException(str(uuid.uuid4())))
+    @mock.patch.object(db, 'volume_update')
+    def test_create_backup_aborted_volume_not_found(self, vol_up_mock,
+                                                    start_backup_mock):
+        """Test error handling when backup fails and volume does not exist."""
+        vol_id = self._create_volume_db_entry(size=1)
+        backup = self._create_backup_db_entry(volume_id=vol_id)
+
+        vol_up_mock.side_effect = exception.VolumeNotFound(volume_id=vol_id)
+
+        self.assertRaises(FakeBackupException,
+                          self.backup_mgr.create_backup,
+                          self.ctxt,
+                          backup)
+        backup.refresh()
+        self.assertEqual(fields.BackupStatus.ERROR, backup.status)
+        self.assertTrue(start_backup_mock.called)
+        self.assertTrue(vol_up_mock.called)
+
     @mock.patch('cinder.backup.manager.BackupManager._start_backup',
                 side_effect=FakeBackupException(str(uuid.uuid4())))
     def test_create_backup_with_snapshot_error(self, mock_start_backup):
diff --git a/releasenotes/notes/backup-volumenotfound-set-to-error-fa47b3631093a702.yaml b/releasenotes/notes/backup-volumenotfound-set-to-error-fa47b3631093a702.yaml
new file mode 100644
index 00000000000..6a84d372930
--- /dev/null
+++ b/releasenotes/notes/backup-volumenotfound-set-to-error-fa47b3631093a702.yaml
@@ -0,0 +1,5 @@
+---
+fixes:
+  - |
+    `Bug #1996049 <https://bugs.launchpad.net/cinder/+bug/1996049>`_: Fixed bug
+    where backup was not set to error on failure when volume did not exist.