diff --git a/cli/command_repository_connect_server.go b/cli/command_repository_connect_server.go
index f8d3ac09a..65a047d00 100644
--- a/cli/command_repository_connect_server.go
+++ b/cli/command_repository_connect_server.go
@@ -6,6 +6,7 @@
 
 	"github.com/pkg/errors"
 
+	"github.com/kopia/kopia/internal/crypto"
 	"github.com/kopia/kopia/internal/passwordpersist"
 	"github.com/kopia/kopia/repo"
 )
@@ -13,8 +14,9 @@
 type commandRepositoryConnectServer struct {
 	co *connectOptions
 
-	connectAPIServerURL             string
-	connectAPIServerCertFingerprint string
+	connectAPIServerURL                              string
+	connectAPIServerCertFingerprint                  string
+	connectAPIServerLocalCacheKeyDerivationAlgorithm string
 
 	svc advancedAppServices
 	out textOutput
@@ -28,13 +30,21 @@ func (c *commandRepositoryConnectServer) setup(svc advancedAppServices, parent c
 	cmd := parent.Command("server", "Connect to a repository API Server.")
 	cmd.Flag("url", "Server URL").Required().StringVar(&c.connectAPIServerURL)
 	cmd.Flag("server-cert-fingerprint", "Server certificate fingerprint").StringVar(&c.connectAPIServerCertFingerprint)
+	//nolint:lll
+	cmd.Flag("local-cache-key-derivation-algorithm", "Key derivation algorithm used to derive the local cache encryption key").Hidden().Default(repo.DefaultKeyDerivationAlgorithm).EnumVar(&c.connectAPIServerLocalCacheKeyDerivationAlgorithm, crypto.AllowedKeyDerivationAlgorithms()...)
 	cmd.Action(svc.noRepositoryAction(c.run))
 }
 
 func (c *commandRepositoryConnectServer) run(ctx context.Context) error {
+	localCacheKeyDerivationAlgorithm := c.connectAPIServerLocalCacheKeyDerivationAlgorithm
+	if localCacheKeyDerivationAlgorithm == "" {
+		localCacheKeyDerivationAlgorithm = repo.DefaultKeyDerivationAlgorithm
+	}
+
 	as := &repo.APIServerInfo{
 		BaseURL:                             strings.TrimSuffix(c.connectAPIServerURL, "/"),
 		TrustedServerCertificateFingerprint: strings.ToLower(c.connectAPIServerCertFingerprint),
+		LocalCacheKeyDerivationAlgorithm:    localCacheKeyDerivationAlgorithm,
 	}
 
 	configFile := c.svc.repositoryConfigFileName()
diff --git a/internal/crypto/key_derivation_nontest.go b/internal/crypto/key_derivation_nontest.go
index e8b8c7659..ce546eacd 100644
--- a/internal/crypto/key_derivation_nontest.go
+++ b/internal/crypto/key_derivation_nontest.go
@@ -39,7 +39,7 @@ func RegisterKeyDerivers(name string, keyDeriver KeyDeriver) {
 func DeriveKeyFromPassword(password string, salt []byte, algorithm string) ([]byte, error) {
 	kd, ok := keyDerivers[algorithm]
 	if !ok {
-		return nil, errors.Errorf("unsupported key algorithm: %v, supported algorithms %v", algorithm, AllowedKeyDerivationAlgorithms())
+		return nil, errors.Errorf("unsupported key derivation algorithm: %v, supported algorithms %v", algorithm, AllowedKeyDerivationAlgorithms())
 	}
 
 	//nolint:wrapcheck
@@ -50,7 +50,7 @@ func DeriveKeyFromPassword(password string, salt []byte, algorithm string) ([]by
 func RecommendedSaltLength(algorithm string) (int, error) {
 	kd, ok := keyDerivers[algorithm]
 	if !ok {
-		return 0, errors.Errorf("unsupported key algorithm: %v, supported algorithms %v", algorithm, AllowedKeyDerivationAlgorithms())
+		return 0, errors.Errorf("failed to get salt length for unsupported key derivation algorithm: %v, supported algorithms %v", algorithm, AllowedKeyDerivationAlgorithms())
 	}
 
 	return kd.RecommendedSaltLength(), nil
diff --git a/internal/servertesting/servertesting.go b/internal/servertesting/servertesting.go
index 875118e0f..0fa211835 100644
--- a/internal/servertesting/servertesting.go
+++ b/internal/servertesting/servertesting.go
@@ -79,6 +79,8 @@ func StartServer(t *testing.T, env *repotesting.Environment, tls bool) *repo.API
 		asi.BaseURL = hs.URL
 	}
 
+	asi.LocalCacheKeyDerivationAlgorithm = repo.DefaultKeyDerivationAlgorithm
+
 	t.Cleanup(hs.Close)
 
 	return asi
diff --git a/repo/api_server_repository.go b/repo/api_server_repository.go
index 0ffa5313b..13207e613 100644
--- a/repo/api_server_repository.go
+++ b/repo/api_server_repository.go
@@ -10,6 +10,7 @@
 type APIServerInfo struct {
 	BaseURL                             string `json:"url"`
 	TrustedServerCertificateFingerprint string `json:"serverCertFingerprint"`
+	LocalCacheKeyDerivationAlgorithm    string `json:"localCacheKeyDerivationAlgorithm,omitempty"`
 }
 
 // ConnectAPIServer sets up repository connection to a particular API server.
diff --git a/repo/open.go b/repo/open.go
index b10a50f5e..577250ffd 100644
--- a/repo/open.go
+++ b/repo/open.go
@@ -58,6 +58,9 @@
 // localCacheIntegrityHMACSecretLength length of HMAC secret protecting local cache items.
 const localCacheIntegrityHMACSecretLength = 16
 
+// DefaultKeyDerivationAlgorithm is the default key derivation algorithm used to derive a cache encryption key.
+const DefaultKeyDerivationAlgorithm = crypto.DefaultKeyDerivationAlgorithm
+
 //nolint:gochecknoglobals
 var localCacheIntegrityPurpose = []byte("local-cache-integrity")
 
@@ -131,7 +134,7 @@ func Open(ctx context.Context, configFile, password string, options *Options) (r
 	return openDirect(ctx, configFile, lc, password, options)
 }
 
-func getContentCacheOrNil(ctx context.Context, opt *content.CachingOptions, password string, mr *metrics.Registry, timeNow func() time.Time) (*cache.PersistentCache, error) {
+func getContentCacheOrNil(ctx context.Context, si *APIServerInfo, opt *content.CachingOptions, password string, mr *metrics.Registry, timeNow func() time.Time) (*cache.PersistentCache, error) {
 	opt = opt.CloneOrDefault()
 
 	cs, err := cache.NewStorageOrNil(ctx, opt.CacheDirectory, opt.ContentCacheSizeBytes, "server-contents")
@@ -143,7 +146,7 @@ func getContentCacheOrNil(ctx context.Context, opt *content.CachingOptions, pass
 	// derive content cache key from the password & HMAC secret
 	saltWithPurpose := append([]byte("content-cache-protection"), opt.HMACSecret...)
 
-	cacheEncryptionKey, err := crypto.DeriveKeyFromPassword(password, saltWithPurpose, crypto.DefaultKeyDerivationAlgorithm)
+	cacheEncryptionKey, err := crypto.DeriveKeyFromPassword(password, saltWithPurpose, si.LocalCacheKeyDerivationAlgorithm)
 	if err != nil {
 		return nil, errors.Wrap(err, "unable to derive cache encryption key from password")
 	}
@@ -171,7 +174,7 @@ func openAPIServer(ctx context.Context, si *APIServerInfo, cliOpts ClientOptions
 
 	mr := metrics.NewRegistry()
 
-	contentCache, err := getContentCacheOrNil(ctx, cachingOptions, password, mr, options.TimeNowFunc)
+	contentCache, err := getContentCacheOrNil(ctx, si, cachingOptions, password, mr, options.TimeNowFunc)
 	if err != nil {
 		return nil, errors.Wrap(err, "error opening content cache")
 	}
diff --git a/tests/end_to_end_test/api_server_repository_test.go b/tests/end_to_end_test/api_server_repository_test.go
index 1b20a5539..0d2ac1e83 100644
--- a/tests/end_to_end_test/api_server_repository_test.go
+++ b/tests/end_to_end_test/api_server_repository_test.go
@@ -136,6 +136,7 @@ func testAPIServerRepository(t *testing.T, allowRepositoryUsers bool) {
 	rep, err := servertesting.ConnectAndOpenAPIServer(t, ctx2, &repo.APIServerInfo{
 		BaseURL:                             sp.BaseURL,
 		TrustedServerCertificateFingerprint: sp.SHA256Fingerprint,
+		LocalCacheKeyDerivationAlgorithm:    repo.DefaultKeyDerivationAlgorithm,
 	}, repo.ClientOptions{
 		Username: "foo",
 		Hostname: "bar",
@@ -258,6 +259,7 @@ func testAPIServerRepository(t *testing.T, allowRepositoryUsers bool) {
 	servertesting.ConnectAndOpenAPIServer(t, ctx, &repo.APIServerInfo{
 		BaseURL:                             sp.BaseURL,
 		TrustedServerCertificateFingerprint: sp.SHA256Fingerprint,
+		LocalCacheKeyDerivationAlgorithm:    repo.DefaultKeyDerivationAlgorithm,
 	}, repo.ClientOptions{
 		Username: "foo",
 		Hostname: "bar",
@@ -328,6 +330,7 @@ func TestFindManifestsPaginationOverGRPC(t *testing.T) {
 	rep, err := servertesting.ConnectAndOpenAPIServer(t, ctx, &repo.APIServerInfo{
 		BaseURL:                             sp.BaseURL,
 		TrustedServerCertificateFingerprint: sp.SHA256Fingerprint,
+		LocalCacheKeyDerivationAlgorithm:    repo.DefaultKeyDerivationAlgorithm,
 	}, repo.ClientOptions{
 		Username: "foo",
 		Hostname: "bar",