diff --git a/homeassistant/components/minecraft_server/__init__.py b/homeassistant/components/minecraft_server/__init__.py
index 6c854750baa..2cd6c51546a 100644
--- a/homeassistant/components/minecraft_server/__init__.py
+++ b/homeassistant/components/minecraft_server/__init__.py
@@ -14,7 +14,7 @@ from homeassistant.const import (
     Platform,
 )
 from homeassistant.core import HomeAssistant, callback
-from homeassistant.exceptions import ConfigEntryError
+from homeassistant.exceptions import ConfigEntryNotReady
 import homeassistant.helpers.device_registry as dr
 import homeassistant.helpers.entity_registry as er
 
@@ -41,9 +41,7 @@ async def async_setup_entry(hass: HomeAssistant, entry: ConfigEntry) -> bool:
     try:
         await api.async_initialize()
     except MinecraftServerAddressError as error:
-        raise ConfigEntryError(
-            f"Server address in configuration entry is invalid: {error}"
-        ) from error
+        raise ConfigEntryNotReady(f"Initialization failed: {error}") from error
 
     # Create coordinator instance.
     coordinator = MinecraftServerCoordinator(hass, entry.data[CONF_NAME], api)
diff --git a/tests/components/minecraft_server/test_init.py b/tests/components/minecraft_server/test_init.py
index 5b0d9509d69..3d554bf1a55 100644
--- a/tests/components/minecraft_server/test_init.py
+++ b/tests/components/minecraft_server/test_init.py
@@ -153,7 +153,7 @@ async def test_setup_entry_lookup_failure(
         )
 
     await hass.async_block_till_done()
-    assert java_mock_config_entry.state == ConfigEntryState.SETUP_ERROR
+    assert java_mock_config_entry.state == ConfigEntryState.SETUP_RETRY
 
 
 async def test_setup_entry_init_failure(