diff --git a/azure/services/agentpools/agentpools.go b/azure/services/agentpools/agentpools.go
index 8953586c921..8f778eba3e9 100644
--- a/azure/services/agentpools/agentpools.go
+++ b/azure/services/agentpools/agentpools.go
@@ -25,11 +25,13 @@ import (
 	"github.com/Azure/go-autorest/autorest/to"
 	"github.com/google/go-cmp/cmp"
 	"github.com/pkg/errors"
+	"k8s.io/utils/ptr"
 	infrav1 "sigs.k8s.io/cluster-api-provider-azure/api/v1beta1"
 	"sigs.k8s.io/cluster-api-provider-azure/azure"
 	"sigs.k8s.io/cluster-api-provider-azure/azure/converters"
 	"sigs.k8s.io/cluster-api-provider-azure/util/maps"
 	"sigs.k8s.io/cluster-api-provider-azure/util/tele"
+	"sigs.k8s.io/cluster-api-provider-azure/util/versions"
 )
 
 const serviceName = "agentpools"
@@ -105,6 +107,14 @@ func (s *Service) Reconcile(ctx context.Context) error {
 			log.V(2).Info(msg)
 			return azure.WithTransientError(errors.New(msg), 20*time.Second)
 		}
+		// Get the higher version out of the existing and new version
+		profileOrchestratorVersion, err := versions.GetHigherK8sVersion(
+			ptr.Deref(existingPool.OrchestratorVersion, ""),
+			ptr.Deref(profile.OrchestratorVersion, ""))
+
+		if err != nil {
+			return errors.Wrap(err, "error while calculating k8s version")
+		}
 
 		// Normalize individual agent pools to diff in case we need to update
 		existingProfile := containerservice.AgentPool{
@@ -122,7 +132,7 @@ func (s *Service) Reconcile(ctx context.Context) error {
 		normalizedProfile := containerservice.AgentPool{
 			ManagedClusterAgentPoolProfileProperties: &containerservice.ManagedClusterAgentPoolProfileProperties{
 				Count:               profile.Count,
-				OrchestratorVersion: profile.OrchestratorVersion,
+				OrchestratorVersion: &profileOrchestratorVersion,
 				Mode:                profile.Mode,
 				EnableAutoScaling:   profile.EnableAutoScaling,
 				MinCount:            profile.MinCount,