diff --git a/spring-cloud-netflix-eureka-client/src/main/java/org/springframework/cloud/netflix/eureka/http/WebClientTransportClientFactory.java b/spring-cloud-netflix-eureka-client/src/main/java/org/springframework/cloud/netflix/eureka/http/WebClientTransportClientFactory.java
index 5a4a20cd7..9a96b25a8 100644
--- a/spring-cloud-netflix-eureka-client/src/main/java/org/springframework/cloud/netflix/eureka/http/WebClientTransportClientFactory.java
+++ b/spring-cloud-netflix-eureka-client/src/main/java/org/springframework/cloud/netflix/eureka/http/WebClientTransportClientFactory.java
@@ -1,5 +1,5 @@
 /*
- * Copyright 2017-2022 the original author or authors.
+ * Copyright 2017-2024 the original author or authors.
  *
  * Licensed under the Apache License, Version 2.0 (the "License");
  * you may not use this file except in compliance with the License.
@@ -50,6 +50,7 @@
 import org.springframework.web.reactive.function.client.ExchangeFilterFunction;
 import org.springframework.web.reactive.function.client.ExchangeFilterFunctions;
 import org.springframework.web.reactive.function.client.WebClient;
+import org.springframework.web.util.UriComponentsBuilder;
 
 /**
  * Provides the custom {@link WebClient.Builder} required by the
@@ -58,6 +59,7 @@
  *
  * @author Daniel Lavoie
  * @author Haytham Mohamed
+ * @author Armin Krezovic
  */
 public class WebClientTransportClientFactory implements TransportClientFactory {
 
@@ -78,14 +80,14 @@ public EurekaHttpClient newClient(EurekaEndpoint endpoint) {
 	}
 
 	private WebClient.Builder setUrl(WebClient.Builder builder, String serviceUrl) {
-		String url = serviceUrl;
+		String url = UriComponentsBuilder.fromUriString(serviceUrl).userInfo(null).toUriString();
+
 		try {
 			URI serviceURI = new URI(serviceUrl);
 			if (serviceURI.getUserInfo() != null) {
 				String[] credentials = serviceURI.getUserInfo().split(":");
 				if (credentials.length == 2) {
 					builder.filter(ExchangeFilterFunctions.basicAuthentication(credentials[0], credentials[1]));
-					url = serviceUrl.replace(credentials[0] + ":" + credentials[1] + "@", "");
 				}
 			}
 		}
diff --git a/spring-cloud-netflix-eureka-client/src/test/java/org/springframework/cloud/netflix/eureka/http/WebClientTransportClientFactoryTest.java b/spring-cloud-netflix-eureka-client/src/test/java/org/springframework/cloud/netflix/eureka/http/WebClientTransportClientFactoryTest.java
index b7d2d17ba..469d83911 100644
--- a/spring-cloud-netflix-eureka-client/src/test/java/org/springframework/cloud/netflix/eureka/http/WebClientTransportClientFactoryTest.java
+++ b/spring-cloud-netflix-eureka-client/src/test/java/org/springframework/cloud/netflix/eureka/http/WebClientTransportClientFactoryTest.java
@@ -1,5 +1,5 @@
 /*
- * Copyright 2017-2022 the original author or authors.
+ * Copyright 2017-2024 the original author or authors.
  *
  * Licensed under the Apache License, Version 2.0 (the "License");
  * you may not use this file except in compliance with the License.
@@ -16,23 +16,57 @@
 
 package org.springframework.cloud.netflix.eureka.http;
 
+import java.time.Duration;
+
 import com.netflix.discovery.shared.resolver.DefaultEndpoint;
 import org.junit.jupiter.api.AfterEach;
 import org.junit.jupiter.api.BeforeEach;
 import org.junit.jupiter.api.Test;
+import org.mockito.ArgumentCaptor;
+import org.mockito.Captor;
+import org.mockito.Mock;
+import org.mockito.junit.jupiter.MockitoSettings;
+import org.mockito.quality.Strictness;
+import reactor.core.publisher.Mono;
 
+import org.springframework.http.HttpHeaders;
+import org.springframework.http.HttpStatus;
+import org.springframework.web.reactive.function.client.ClientRequest;
+import org.springframework.web.reactive.function.client.ClientResponse;
+import org.springframework.web.reactive.function.client.ExchangeFunction;
 import org.springframework.web.reactive.function.client.WebClient;
 
+import static org.assertj.core.api.Assertions.assertThat;
+import static org.mockito.BDDMockito.given;
+import static org.mockito.Mockito.mock;
+import static org.mockito.Mockito.verify;
+import static org.mockito.Mockito.verifyNoMoreInteractions;
+import static org.mockito.Mockito.when;
+
 /**
  * @author Daniel Lavoie
+ * @author Armin Krezovic
  */
+@MockitoSettings(strictness = Strictness.LENIENT)
 class WebClientTransportClientFactoryTest {
 
+	@Mock
+	private ExchangeFunction exchangeFunction;
+
+	@Captor
+	private ArgumentCaptor<ClientRequest> captor;
+
 	private WebClientTransportClientFactory transportClientFatory;
 
 	@BeforeEach
 	void setup() {
-		transportClientFatory = new WebClientTransportClientFactory(WebClient::builder);
+		ClientResponse mockResponse = mock();
+		when(mockResponse.statusCode()).thenReturn(HttpStatus.OK);
+		when(mockResponse.bodyToMono(Void.class)).thenReturn(Mono.empty());
+		given(exchangeFunction.exchange(captor.capture())).willReturn(Mono.just(mockResponse));
+
+		transportClientFatory = new WebClientTransportClientFactory(
+				() -> WebClient.builder().exchangeFunction(exchangeFunction));
 	}
 
 	@Test
@@ -45,6 +79,23 @@ void testInvalidUserInfo() {
 		transportClientFatory.newClient(new DefaultEndpoint("http://test@localhost:8761"));
 	}
 
+	@Test
+	void testUserInfoWithEncodedCharacters() {
+		String encodedBasicAuth = HttpHeaders.encodeBasicAuth("test", "MyPassword@", null);
+		String expectedAuthHeader = "Basic " + encodedBasicAuth;
+		String expectedUrl = "http://localhost:8761";
+
+		WebClientEurekaHttpClient client = (WebClientEurekaHttpClient) transportClientFatory
+				.newClient(new DefaultEndpoint("http://test:MyPassword%40@localhost:8761"));
+
+		client.getWebClient().get().retrieve().bodyToMono(Void.class).block(Duration.ofSeconds(10));
+
+		ClientRequest request = verifyAndGetRequest();
+
+		assertThat(request.headers().getFirst(HttpHeaders.AUTHORIZATION)).isEqualTo(expectedAuthHeader);
+		assertThat(request.url().toString()).isEqualTo(expectedUrl);
+	}
+
 	@Test
 	void testUserInfo() {
 		transportClientFatory.newClient(new DefaultEndpoint("http://test:test@localhost:8761"));
@@ -55,4 +106,11 @@ void shutdown() {
 		transportClientFatory.shutdown();
 	}
 
+	private ClientRequest verifyAndGetRequest() {
+		ClientRequest request = captor.getValue();
+		verify(exchangeFunction).exchange(request);
+		verifyNoMoreInteractions(exchangeFunction);
+		return request;
+	}
+
 }