diff --git a/neutron/db/ipam_pluggable_backend.py b/neutron/db/ipam_pluggable_backend.py
index 4a82ac22dc7..4c8fb94363a 100644
--- a/neutron/db/ipam_pluggable_backend.py
+++ b/neutron/db/ipam_pluggable_backend.py
@@ -386,8 +386,14 @@ class IpamPluggableBackend(ipam_backend_mixin.IpamBackendMixin):
             original = self._make_port_dict(db_port, process_extensions=False)
             if original.get('mac_address') != new_mac:
                 original_ips = original.get('fixed_ips', [])
-                new_ips = new_port.setdefault('fixed_ips', original_ips)
-                new_ips_subnets = [new_ip['subnet_id'] for new_ip in new_ips]
+                # NOTE(hjensas): Only set the default for 'fixed_ips' in
+                # new_port if the original port or new_port actually have IPs.
+                # Setting the default to [] breaks deferred IP allocation.
+                # See Bug: https://bugs.launchpad.net/neutron/+bug/1811905
+                if original_ips or new_port.get('fixed_ips'):
+                    new_ips = new_port.setdefault('fixed_ips', original_ips)
+                    new_ips_subnets = [new_ip['subnet_id']
+                                       for new_ip in new_ips]
                 for orig_ip in original_ips:
                     if ipv6_utils.is_eui64_address(orig_ip.get('ip_address')):
                         subnet_to_delete = {}
diff --git a/neutron/tests/unit/extensions/test_segment.py b/neutron/tests/unit/extensions/test_segment.py
index 192dd0a0167..c4ab96daf21 100644
--- a/neutron/tests/unit/extensions/test_segment.py
+++ b/neutron/tests/unit/extensions/test_segment.py
@@ -18,6 +18,7 @@ import mock
 import netaddr
 from neutron_lib.api.definitions import ip_allocation as ipalloc_apidef
 from neutron_lib.api.definitions import l2_adjacency as l2adj_apidef
+from neutron_lib.api.definitions import port as port_apidef
 from neutron_lib.api.definitions import portbindings
 from neutron_lib.callbacks import events
 from neutron_lib.callbacks import exceptions
@@ -1578,6 +1579,27 @@ class TestSegmentAwareIpam(SegmentAwareIpamTestCase):
         # Since the new host is in the same segment, it succeeds.
         self.assertEqual(webob.exc.HTTPOk.code, response.status_int)
 
+    def test_port_update_deferred_allocation_binding_info_and_new_mac(self):
+        """Binding information and new mac address is provided on update"""
+        network, segment, subnet = self._create_test_segment_with_subnet()
+
+        # Map the host to the segment
+        self._setup_host_mappings([(segment['segment']['id'], 'fakehost')])
+
+        port = self._create_deferred_ip_port(network)
+        self._validate_deferred_ip_allocation(port['port']['id'])
+
+        # Try requesting an IP (but the only subnet is on a segment)
+        data = {'port': {portbindings.HOST_ID: 'fakehost',
+                         port_apidef.PORT_MAC_ADDRESS: '00:00:00:00:00:01'}}
+        port_id = port['port']['id']
+        port_req = self.new_update_request('ports', data, port_id)
+        response = port_req.get_response(self.api)
+
+        # Port update succeeds and allocates a new IP address.
+        self.assertEqual(webob.exc.HTTPOk.code, response.status_int)
+        self._assert_one_ip_in_subnet(response, subnet['subnet']['cidr'])
+
 
 class TestSegmentAwareIpamML2(TestSegmentAwareIpam):
 
diff --git a/releasenotes/notes/fix-deferred-alloction-when-new-mac-in-same-request-as-binding-data-2a01c1ed1a8eff66.yaml b/releasenotes/notes/fix-deferred-alloction-when-new-mac-in-same-request-as-binding-data-2a01c1ed1a8eff66.yaml
new file mode 100644
index 00000000000..091b6274ec3
--- /dev/null
+++ b/releasenotes/notes/fix-deferred-alloction-when-new-mac-in-same-request-as-binding-data-2a01c1ed1a8eff66.yaml
@@ -0,0 +1,10 @@
+---
+fixes:
+  - |
+    Fixes an issue causing IP allocation on port update to fail when the
+    initial IP allocation was deferred due to lack of binding info. If both the
+    port mac_address and binding info (binding_host_id) were updated in the
+    same request, the fixed_ips field was added to the request internally. The
+    code to complete the deferred allocation failed to execute in that case.
+    (For more information see bug `1811905
+    <https://bugs.launchpad.net/neutron/+bug/1811905>`_.)