diff --git a/util/git/creds.go b/util/git/creds.go
index 18698449082bf..e0ca584ebb7ad 100644
--- a/util/git/creds.go
+++ b/util/git/creds.go
@@ -277,6 +277,9 @@ func (c SSHCreds) Environ() (io.Closer, []string, error) {
 	if err != nil {
 		return nil, nil, err
 	}
+
+	sshCloser := sshPrivateKeyFile(file.Name())
+
 	defer func() {
 		if err = file.Close(); err != nil {
 			log.WithFields(log.Fields{
@@ -288,6 +291,7 @@ func (c SSHCreds) Environ() (io.Closer, []string, error) {
 
 	_, err = file.WriteString(c.sshPrivateKey + "\n")
 	if err != nil {
+		sshCloser.Close()
 		return nil, nil, err
 	}
 
@@ -310,6 +314,7 @@ func (c SSHCreds) Environ() (io.Closer, []string, error) {
 	if c.proxy != "" {
 		parsedProxyURL, err := url.Parse(c.proxy)
 		if err != nil {
+			sshCloser.Close()
 			return nil, nil, fmt.Errorf("failed to set environment variables related to socks5 proxy, could not parse proxy URL '%s': %w", c.proxy, err)
 		}
 		args = append(args, "-o", fmt.Sprintf("ProxyCommand='connect-proxy -S %s:%s -5 %%h %%p'",
@@ -324,7 +329,7 @@ func (c SSHCreds) Environ() (io.Closer, []string, error) {
 	}
 	env = append(env, []string{fmt.Sprintf("GIT_SSH_COMMAND=%s", strings.Join(args, " "))}...)
 	env = append(env, proxyEnv...)
-	return sshPrivateKeyFile(file.Name()), env, nil
+	return sshCloser, env, nil
 }
 
 // GitHubAppCreds to authenticate as GitHub application
diff --git a/util/git/creds_test.go b/util/git/creds_test.go
index 23a705ed33574..69c1150db881b 100644
--- a/util/git/creds_test.go
+++ b/util/git/creds_test.go
@@ -17,6 +17,7 @@ import (
 
 	"github.com/argoproj/argo-cd/v2/util/cert"
 	"github.com/argoproj/argo-cd/v2/util/io"
+	argoio "github.com/argoproj/gitops-engine/pkg/utils/io"
 )
 
 type cred struct {
@@ -302,6 +303,37 @@ func Test_SSHCreds_Environ_WithProxyUserNamePassword(t *testing.T) {
 	}
 }
 
+func Test_SSHCreds_Environ_TempFileCleanupOnInvalidProxyURL(t *testing.T) {
+
+	// Previously, if the proxy URL was invalid, a temporary file would be left in /dev/shm. This ensures the file is cleaned up in this case.
+
+	// countDev returns the number of files in /dev/shm (argoio.TempDir)
+	countFilesInDevShm := func() int {
+		entries, err := os.ReadDir(argoio.TempDir)
+		require.NoError(t, err)
+
+		return len(entries)
+	}
+
+	for _, insecureIgnoreHostKey := range []bool{false, true} {
+		tempDir := t.TempDir()
+		caFile := path.Join(tempDir, "caFile")
+		err := os.WriteFile(caFile, []byte(""), os.FileMode(0600))
+		require.NoError(t, err)
+		creds := NewSSHCreds("sshPrivateKey", caFile, insecureIgnoreHostKey, &NoopCredsStore{}, ":invalid-proxy-url")
+
+		filesInDevShmBeforeInvocation := countFilesInDevShm()
+
+		_, _, err = creds.Environ()
+		require.Error(t, err)
+
+		filesInDevShmAfterInvocation := countFilesInDevShm()
+
+		assert.Equal(t, filesInDevShmBeforeInvocation, filesInDevShmAfterInvocation, "no temporary files should leak if the proxy url cannot be parsed")
+
+	}
+}
+
 const gcpServiceAccountKeyJSON = `{
   "type": "service_account",
   "project_id": "my-google-project",