diff --git a/homeassistant/components/paperless_ngx/__init__.py b/homeassistant/components/paperless_ngx/__init__.py
index 0fea90b7ea3..da990be7173 100644
--- a/homeassistant/components/paperless_ngx/__init__.py
+++ b/homeassistant/components/paperless_ngx/__init__.py
@@ -96,7 +96,7 @@ async def _get_paperless_api(
             translation_key="forbidden",
         ) from err
     except InitializationError as err:
-        raise ConfigEntryError(
+        raise ConfigEntryNotReady(
             translation_domain=DOMAIN,
             translation_key="cannot_connect",
         ) from err
diff --git a/tests/components/paperless_ngx/test_init.py b/tests/components/paperless_ngx/test_init.py
index fd459213ea0..924e3966c79 100644
--- a/tests/components/paperless_ngx/test_init.py
+++ b/tests/components/paperless_ngx/test_init.py
@@ -63,7 +63,7 @@ async def test_load_config_status_forbidden(
             "user_inactive_or_deleted",
         ),
         (PaperlessForbiddenError(), ConfigEntryState.SETUP_ERROR, "forbidden"),
-        (InitializationError(), ConfigEntryState.SETUP_ERROR, "cannot_connect"),
+        (InitializationError(), ConfigEntryState.SETUP_RETRY, "cannot_connect"),
     ],
 )
 async def test_setup_config_error_handling(