diff --git a/refs/files-backend.c b/refs/files-backend.c
index 5848f32ef8..63e55e6773 100644
--- a/refs/files-backend.c
+++ b/refs/files-backend.c
@@ -2701,18 +2701,32 @@ static int files_transaction_prepare(struct ref_store *ref_store,
 		if (is_packed_transaction_needed(refs->packed_ref_store,
 						 packed_transaction)) {
 			ret = ref_transaction_prepare(packed_transaction, err);
+			/*
+			 * A failure during the prepare step will abort
+			 * itself, but not free. Do that now, and disconnect
+			 * from the files_transaction so it does not try to
+			 * abort us when we hit the cleanup code below.
+			 */
+			if (ret) {
+				ref_transaction_free(packed_transaction);
+				backend_data->packed_transaction = NULL;
+			}
 		} else {
 			/*
 			 * We can skip rewriting the `packed-refs`
 			 * file. But we do need to leave it locked, so
 			 * that somebody else doesn't pack a reference
 			 * that we are trying to delete.
+			 *
+			 * We need to disconnect our transaction from
+			 * backend_data, since the abort (whether successful or
+			 * not) will free it.
 			 */
+			backend_data->packed_transaction = NULL;
 			if (ref_transaction_abort(packed_transaction, err)) {
 				ret = TRANSACTION_GENERIC_ERROR;
 				goto cleanup;
 			}
-			backend_data->packed_transaction = NULL;
 		}
 	}
 
diff --git a/t/t1404-update-ref-errors.sh b/t/t1404-update-ref-errors.sh
index 6b6a8e2292..970c5c36b9 100755
--- a/t/t1404-update-ref-errors.sh
+++ b/t/t1404-update-ref-errors.sh
@@ -618,4 +618,20 @@ test_expect_success 'delete fails cleanly if packed-refs file is locked' '
 	test_cmp unchanged actual
 '
 
+test_expect_success 'delete fails cleanly if packed-refs.new write fails' '
+	# Setup and expectations are similar to the test above.
+	prefix=refs/failed-packed-refs &&
+	git update-ref $prefix/foo $C &&
+	git pack-refs --all &&
+	git update-ref $prefix/foo $D &&
+	git for-each-ref $prefix >unchanged &&
+	# This should not happen in practice, but it is an easy way to get a
+	# reliable error (we open with create_tempfile(), which uses O_EXCL).
+	: >.git/packed-refs.new &&
+	test_when_finished "rm -f .git/packed-refs.new" &&
+	test_must_fail git update-ref -d $prefix/foo &&
+	git for-each-ref $prefix >actual &&
+	test_cmp unchanged actual
+'
+
 test_done