diff --git a/drivers/net/ethernet/mellanox/mlx5/core/en/rep/neigh.c b/drivers/net/ethernet/mellanox/mlx5/core/en/rep/neigh.c
index 90629203508875..58e27038c947bd 100644
--- a/drivers/net/ethernet/mellanox/mlx5/core/en/rep/neigh.c
+++ b/drivers/net/ethernet/mellanox/mlx5/core/en/rep/neigh.c
@@ -110,11 +110,25 @@ static void mlx5e_rep_neigh_stats_work(struct work_struct *work)
 	rtnl_unlock();
 }
 
+struct neigh_update_work {
+	struct work_struct work;
+	struct neighbour *n;
+	struct mlx5e_neigh_hash_entry *nhe;
+};
+
+static void mlx5e_release_neigh_update_work(struct neigh_update_work *update_work)
+{
+	neigh_release(update_work->n);
+	mlx5e_rep_neigh_entry_release(update_work->nhe);
+	kfree(update_work);
+}
+
 static void mlx5e_rep_neigh_update(struct work_struct *work)
 {
-	struct mlx5e_neigh_hash_entry *nhe =
-		container_of(work, struct mlx5e_neigh_hash_entry, neigh_update_work);
-	struct neighbour *n = nhe->n;
+	struct neigh_update_work *update_work = container_of(work, struct neigh_update_work,
+							     work);
+	struct mlx5e_neigh_hash_entry *nhe = update_work->nhe;
+	struct neighbour *n = update_work->n;
 	struct mlx5e_encap_entry *e;
 	unsigned char ha[ETH_ALEN];
 	struct mlx5e_priv *priv;
@@ -146,30 +160,42 @@ static void mlx5e_rep_neigh_update(struct work_struct *work)
 		mlx5e_rep_update_flows(priv, e, neigh_connected, ha);
 		mlx5e_encap_put(priv, e);
 	}
-	mlx5e_rep_neigh_entry_release(nhe);
 	rtnl_unlock();
-	neigh_release(n);
+	mlx5e_release_neigh_update_work(update_work);
 }
 
-static void mlx5e_rep_queue_neigh_update_work(struct mlx5e_priv *priv,
-					      struct mlx5e_neigh_hash_entry *nhe,
-					      struct neighbour *n)
+static struct neigh_update_work *mlx5e_alloc_neigh_update_work(struct mlx5e_priv *priv,
+							       struct neighbour *n)
 {
-	/* Take a reference to ensure the neighbour and mlx5 encap
-	 * entry won't be destructed until we drop the reference in
-	 * delayed work.
-	 */
-	neigh_hold(n);
+	struct neigh_update_work *update_work;
+	struct mlx5e_neigh_hash_entry *nhe;
+	struct mlx5e_neigh m_neigh = {};
 
-	/* This assignment is valid as long as the the neigh reference
-	 * is taken
-	 */
-	nhe->n = n;
+	update_work = kzalloc(sizeof(*update_work), GFP_ATOMIC);
+	if (WARN_ON(!update_work))
+		return NULL;
 
-	if (!queue_work(priv->wq, &nhe->neigh_update_work)) {
-		mlx5e_rep_neigh_entry_release(nhe);
-		neigh_release(n);
+	m_neigh.dev = n->dev;
+	m_neigh.family = n->ops->family;
+	memcpy(&m_neigh.dst_ip, n->primary_key, n->tbl->key_len);
+
+	/* Obtain reference to nhe as last step in order not to release it in
+	 * atomic context.
+	 */
+	rcu_read_lock();
+	nhe = mlx5e_rep_neigh_entry_lookup(priv, &m_neigh);
+	rcu_read_unlock();
+	if (!nhe) {
+		kfree(update_work);
+		return NULL;
 	}
+
+	INIT_WORK(&update_work->work, mlx5e_rep_neigh_update);
+	neigh_hold(n);
+	update_work->n = n;
+	update_work->nhe = nhe;
+
+	return update_work;
 }
 
 static int mlx5e_rep_netevent_event(struct notifier_block *nb,
@@ -181,7 +207,7 @@ static int mlx5e_rep_netevent_event(struct notifier_block *nb,
 	struct net_device *netdev = rpriv->netdev;
 	struct mlx5e_priv *priv = netdev_priv(netdev);
 	struct mlx5e_neigh_hash_entry *nhe = NULL;
-	struct mlx5e_neigh m_neigh = {};
+	struct neigh_update_work *update_work;
 	struct neigh_parms *p;
 	struct neighbour *n;
 	bool found = false;
@@ -196,17 +222,11 @@ static int mlx5e_rep_netevent_event(struct notifier_block *nb,
 #endif
 			return NOTIFY_DONE;
 
-		m_neigh.dev = n->dev;
-		m_neigh.family = n->ops->family;
-		memcpy(&m_neigh.dst_ip, n->primary_key, n->tbl->key_len);
-
-		rcu_read_lock();
-		nhe = mlx5e_rep_neigh_entry_lookup(priv, &m_neigh);
-		rcu_read_unlock();
-		if (!nhe)
+		update_work = mlx5e_alloc_neigh_update_work(priv, n);
+		if (!update_work)
 			return NOTIFY_DONE;
 
-		mlx5e_rep_queue_neigh_update_work(priv, nhe, n);
+		queue_work(priv->wq, &update_work->work);
 		break;
 
 	case NETEVENT_DELAY_PROBE_TIME_UPDATE:
@@ -352,7 +372,6 @@ int mlx5e_rep_neigh_entry_create(struct mlx5e_priv *priv,
 
 	(*nhe)->priv = priv;
 	memcpy(&(*nhe)->m_neigh, &e->m_neigh, sizeof(e->m_neigh));
-	INIT_WORK(&(*nhe)->neigh_update_work, mlx5e_rep_neigh_update);
 	spin_lock_init(&(*nhe)->encap_list_lock);
 	INIT_LIST_HEAD(&(*nhe)->encap_list);
 	refcount_set(&(*nhe)->refcnt, 1);
diff --git a/drivers/net/ethernet/mellanox/mlx5/core/en_rep.h b/drivers/net/ethernet/mellanox/mlx5/core/en_rep.h
index 622c27ae4ac7d3..0d1562e20118cd 100644
--- a/drivers/net/ethernet/mellanox/mlx5/core/en_rep.h
+++ b/drivers/net/ethernet/mellanox/mlx5/core/en_rep.h
@@ -135,12 +135,6 @@ struct mlx5e_neigh_hash_entry {
 	/* encap list sharing the same neigh */
 	struct list_head encap_list;
 
-	/* valid only when the neigh reference is taken during
-	 * neigh_update_work workqueue callback.
-	 */
-	struct neighbour *n;
-	struct work_struct neigh_update_work;
-
 	/* neigh hash entry can be deleted only when the refcount is zero.
 	 * refcount is needed to avoid neigh hash entry removal by TC, while
 	 * it's used by the neigh notification call.