diff --git a/homeassistant/components/esphome/config_flow.py b/homeassistant/components/esphome/config_flow.py
index ecd49718559..9ed7ad7123d 100644
--- a/homeassistant/components/esphome/config_flow.py
+++ b/homeassistant/components/esphome/config_flow.py
@@ -55,6 +55,7 @@ class EsphomeFlowHandler(ConfigFlow, domain=DOMAIN):
         self._host: str | None = None
         self._port: int | None = None
         self._password: str | None = None
+        self._noise_required: bool | None = None
         self._noise_psk: str | None = None
         self._device_info: DeviceInfo | None = None
         self._reauth_entry: ConfigEntry | None = None
@@ -151,33 +152,45 @@ class EsphomeFlowHandler(ConfigFlow, domain=DOMAIN):
         self.context["title_placeholders"] = {"name": self._name}
 
     async def _async_try_fetch_device_info(self) -> FlowResult:
-        error = await self.fetch_device_info()
+        """Try to fetch device info and return any errors."""
+        response: str | None
+        if self._noise_required:
+            # If we already know we need encryption, don't try to fetch device info
+            # without encryption.
+            response = ERROR_REQUIRES_ENCRYPTION_KEY
+        else:
+            # After 2024.08, stop trying to fetch device info without encryption
+            # so we can avoid probe requests to check for password. At this point
+            # most devices should announce encryption support and password is
+            # deprecated and can be discovered by trying to connect only after they
+            # interact with the flow since it is expected to be a rare case.
+            response = await self.fetch_device_info()
 
-        if error == ERROR_REQUIRES_ENCRYPTION_KEY:
+        if response == ERROR_REQUIRES_ENCRYPTION_KEY:
             if not self._device_name and not self._noise_psk:
                 # If device name is not set we can send a zero noise psk
                 # to get the device name which will allow us to populate
                 # the device name and hopefully get the encryption key
                 # from the dashboard.
                 self._noise_psk = ZERO_NOISE_PSK
-                error = await self.fetch_device_info()
+                response = await self.fetch_device_info()
                 self._noise_psk = None
 
             if (
                 self._device_name
                 and await self._retrieve_encryption_key_from_dashboard()
             ):
-                error = await self.fetch_device_info()
+                response = await self.fetch_device_info()
 
             # If the fetched key is invalid, unset it again.
-            if error == ERROR_INVALID_ENCRYPTION_KEY:
+            if response == ERROR_INVALID_ENCRYPTION_KEY:
                 self._noise_psk = None
-                error = ERROR_REQUIRES_ENCRYPTION_KEY
+                response = ERROR_REQUIRES_ENCRYPTION_KEY
 
-        if error == ERROR_REQUIRES_ENCRYPTION_KEY:
+        if response == ERROR_REQUIRES_ENCRYPTION_KEY:
             return await self.async_step_encryption_key()
-        if error is not None:
-            return await self._async_step_user_base(error=error)
+        if response is not None:
+            return await self._async_step_user_base(error=response)
         return await self._async_authenticate_or_add()
 
     async def _async_authenticate_or_add(self) -> FlowResult:
@@ -220,6 +233,7 @@ class EsphomeFlowHandler(ConfigFlow, domain=DOMAIN):
         self._device_name = device_name
         self._host = discovery_info.host
         self._port = discovery_info.port
+        self._noise_required = bool(discovery_info.properties.get("api_encryption"))
 
         # Check if already configured
         await self.async_set_unique_id(mac_address)
diff --git a/tests/components/esphome/test_config_flow.py b/tests/components/esphome/test_config_flow.py
index f5b7795a57b..28d411be939 100644
--- a/tests/components/esphome/test_config_flow.py
+++ b/tests/components/esphome/test_config_flow.py
@@ -1233,6 +1233,72 @@ async def test_zeroconf_encryption_key_via_dashboard(
     assert mock_client.noise_psk == VALID_NOISE_PSK
 
 
+async def test_zeroconf_encryption_key_via_dashboard_with_api_encryption_prop(
+    hass: HomeAssistant,
+    mock_client,
+    mock_zeroconf: None,
+    mock_dashboard,
+    mock_setup_entry: None,
+) -> None:
+    """Test encryption key retrieved from dashboard with api_encryption property set."""
+    service_info = zeroconf.ZeroconfServiceInfo(
+        host="192.168.43.183",
+        addresses=["192.168.43.183"],
+        hostname="test8266.local.",
+        name="mock_name",
+        port=6053,
+        properties={
+            "mac": "1122334455aa",
+            "api_encryption": "any",
+        },
+        type="mock_type",
+    )
+    flow = await hass.config_entries.flow.async_init(
+        "esphome", context={"source": config_entries.SOURCE_ZEROCONF}, data=service_info
+    )
+
+    assert flow["type"] == FlowResultType.FORM
+    assert flow["step_id"] == "discovery_confirm"
+
+    mock_dashboard["configured"].append(
+        {
+            "name": "test8266",
+            "configuration": "test8266.yaml",
+        }
+    )
+
+    await dashboard.async_get_dashboard(hass).async_refresh()
+
+    mock_client.device_info.side_effect = [
+        DeviceInfo(
+            uses_password=False,
+            name="test8266",
+            mac_address="11:22:33:44:55:AA",
+        ),
+    ]
+
+    with patch(
+        "homeassistant.components.esphome.dashboard.ESPHomeDashboardAPI.get_encryption_key",
+        return_value=VALID_NOISE_PSK,
+    ) as mock_get_encryption_key:
+        result = await hass.config_entries.flow.async_configure(
+            flow["flow_id"], user_input={}
+        )
+
+    assert len(mock_get_encryption_key.mock_calls) == 1
+
+    assert result["type"] == FlowResultType.CREATE_ENTRY
+    assert result["title"] == "test8266"
+    assert result["data"][CONF_HOST] == "192.168.43.183"
+    assert result["data"][CONF_PORT] == 6053
+    assert result["data"][CONF_NOISE_PSK] == VALID_NOISE_PSK
+
+    assert result["result"]
+    assert result["result"].unique_id == "11:22:33:44:55:aa"
+
+    assert mock_client.noise_psk == VALID_NOISE_PSK
+
+
 async def test_zeroconf_no_encryption_key_via_dashboard(
     hass: HomeAssistant,
     mock_client,