diff --git a/homeassistant/config_entries.py b/homeassistant/config_entries.py
index a13225c4dfe..7209ad8cbca 100644
--- a/homeassistant/config_entries.py
+++ b/homeassistant/config_entries.py
@@ -2437,6 +2437,17 @@ class ConfigEntries:
 
         for domain, unique_ids in self._entries._domain_unique_id_index.items():  # noqa: SLF001
             for unique_id, entries in unique_ids.items():
+                # We might mutate the list of entries, so we need a copy to not mess up
+                # the index
+                entries = list(entries)
+
+                # There's no need to raise an issue for ignored entries, we can
+                # safely remove them once we no longer allow unique id collisions.
+                # Iterate over a copy of the copy to allow mutating while iterating
+                for entry in list(entries):
+                    if entry.source == SOURCE_IGNORE:
+                        entries.remove(entry)
+
                 if len(entries) < 2:
                     continue
                 issue_id = f"{ISSUE_UNIQUE_ID_COLLISION}_{domain}_{unique_id}"
diff --git a/tests/test_config_entries.py b/tests/test_config_entries.py
index 3e3f3b4c504..54008a394b5 100644
--- a/tests/test_config_entries.py
+++ b/tests/test_config_entries.py
@@ -7224,6 +7224,12 @@ async def test_unique_id_collision_issues(
     for _ in range(6):
         test3.append(MockConfigEntry(domain="test3", unique_id="not_unique"))
         await manager.async_add(test3[-1])
+    # Add an ignored config entry
+    await manager.async_add(
+        MockConfigEntry(
+            domain="test2", unique_id="group_1", source=config_entries.SOURCE_IGNORE
+        )
+    )
 
     # Check we get one issue for domain test2 and one issue for domain test3
     assert len(issue_registry.issues) == 2
@@ -7270,7 +7276,7 @@ async def test_unique_id_collision_issues(
         (HOMEASSISTANT_DOMAIN, "config_entry_unique_id_collision_test2_group_2"),
     }
 
-    # Remove the last test2 group2 duplicate, a new issue is created
+    # Remove the last test2 group2 duplicate, the issue is cleared
     await manager.async_remove(test2_group_2[1].entry_id)
     assert not issue_registry.issues