diff --git a/airflow/dag_processing/bundles/git.py b/airflow/dag_processing/bundles/git.py
index 40f0516fcf203e..bc746e063c2002 100644
--- a/airflow/dag_processing/bundles/git.py
+++ b/airflow/dag_processing/bundles/git.py
@@ -106,14 +106,16 @@ def set_git_env(self, key: str) -> dict[str, str]:
         return self.env
 
     @contextlib.contextmanager
-    def setup_inline_key(self):
+    def configure_hook_env(self):
         if self.private_key:
             with tempfile.NamedTemporaryFile(mode="w", delete=True) as tmp_keyfile:
                 tmp_keyfile.write(self.private_key)
                 tmp_keyfile.flush()
                 os.chmod(tmp_keyfile.name, 0o600)
-                yield tmp_keyfile.name
+                self.set_git_env(tmp_keyfile.name)
+                yield
         else:
+            self.set_git_env(self.private_key)
             yield
 
 
@@ -157,7 +159,7 @@ def __init__(
             self.log.warning("Could not create GitHook for connection %s : %s", self.git_conn_id, e)
 
     def _initialize(self):
-        with self.hook.setup_inline_key() as tmp_keyfile:
+        with self.hook.configure_hook_env() as tmp_keyfile:
             self.hook.env = self.hook.set_git_env(tmp_keyfile)
             self._clone_bare_repo_if_required()
             self._ensure_version_in_bare_repo()
@@ -263,8 +265,7 @@ def refresh(self) -> None:
         if self.version:
             raise AirflowException("Refreshing a specific version is not supported")
 
-        with self.hook.setup_inline_key() as tmp_keyfile:
-            self.hook.env = self.hook.set_git_env(tmp_keyfile)
+        with self.hook.configure_hook_env():
             self._fetch_bare_repo()
             self.repo.remotes.origin.pull()
 
diff --git a/tests/dag_processing/test_dag_bundles.py b/tests/dag_processing/test_dag_bundles.py
index 01309896599bce..c4d4ff59ba2449 100644
--- a/tests/dag_processing/test_dag_bundles.py
+++ b/tests/dag_processing/test_dag_bundles.py
@@ -227,16 +227,18 @@ def test_private_key_lazy_env_var(self):
             "GIT_SSH_COMMAND": "ssh -i dummy_inline_key -o IdentitiesOnly=yes -o StrictHostKeyChecking=no"
         }
 
-    def test_setup_inline_key(self):
+    def test_configure_hook_env(self):
         hook = GitHook(git_conn_id=CONN_ONLY_INLINE_KEY)
         assert hasattr(hook, "private_key")
 
         hook.set_git_env("dummy_inline_key")
 
-        with hook.setup_inline_key() as tmp_keyfile:
-            assert os.path.exists(tmp_keyfile)
+        with hook.configure_hook_env():
+            command = hook.env.get("GIT_SSH_COMMAND")
+            temp_key_path = command.split()[2]
+            assert os.path.exists(temp_key_path)
 
-        assert not os.path.exists(tmp_keyfile)
+        assert not os.path.exists(temp_key_path)
 
 
 class TestGitDagBundle: