diff --git a/.changelog/12289.txt b/.changelog/12289.txt
new file mode 100644
index 00000000000..1b1372ca805
--- /dev/null
+++ b/.changelog/12289.txt
@@ -0,0 +1,3 @@
+```release-note:bug
+sql: fixed edition downgrade failure for an `ENTERPRISE_PLUS` instance with data cache enabled.
+```
\ No newline at end of file
diff --git a/google/services/sql/resource_sql_database_instance.go b/google/services/sql/resource_sql_database_instance.go
index 0d00c6da590..d132d569f4e 100644
--- a/google/services/sql/resource_sql_database_instance.go
+++ b/google/services/sql/resource_sql_database_instance.go
@@ -2026,6 +2026,7 @@ func resourceSqlDatabaseInstanceUpdate(d *schema.ResourceData, meta interface{})
 	instance.Settings.SettingsVersion = int64(_settings["version"].(int))
 	// Collation cannot be included in the update request
 	instance.Settings.Collation = ""
+	instance.Settings.DataCacheConfig = expandDataCacheConfig(_settings["data_cache_config"].([]interface{}))
 
 	// Lock on the master_instance_name just in case updating any replica
 	// settings causes operations on the master.
diff --git a/google/services/sql/resource_sql_database_instance_test.go b/google/services/sql/resource_sql_database_instance_test.go
index 7bcc4b706e2..80ca8657fc2 100644
--- a/google/services/sql/resource_sql_database_instance_test.go
+++ b/google/services/sql/resource_sql_database_instance_test.go
@@ -1881,7 +1881,6 @@ func TestAccSqlDatabaseInstance_Postgres_Edition_Upgrade(t *testing.T) {
 }
 
 func TestAccSqlDatabaseInstance_Edition_Downgrade(t *testing.T) {
-	t.Skip("https://github.com/hashicorp/terraform-provider-google/issues/20010")
 	t.Parallel()
 	enterprisePlusTier := "db-perf-optimized-N-2"
 	enterpriseTier := "db-custom-2-13312"