diff --git a/exposed-core/src/main/kotlin/org/jetbrains/exposed/sql/ColumnDiff.kt b/exposed-core/src/main/kotlin/org/jetbrains/exposed/sql/ColumnDiff.kt
index 8b360f1d7a..5b7f01c7f2 100644
--- a/exposed-core/src/main/kotlin/org/jetbrains/exposed/sql/ColumnDiff.kt
+++ b/exposed-core/src/main/kotlin/org/jetbrains/exposed/sql/ColumnDiff.kt
@@ -4,15 +4,15 @@ package org.jetbrains.exposed.sql
  * Represents differences between a column definition and database metadata for the existing column.
  */
 data class ColumnDiff(
-    /** Whether the nullability of the existing column is correct. */
+    /** Whether there is a mismatch between nullability of the existing column and the defined column. */
     val nullability: Boolean,
-    /** Whether the existing column has a matching auto-increment sequence. */
+    /** Whether there is a mismatch between auto-increment status of the existing column and the defined column. */
     val autoInc: Boolean,
-    /** Whether the default value of the existing column is correct. */
+    /** Whether the default value of the existing column matches that of the defined column. */
     val defaults: Boolean,
-    /** Whether the existing column identifier matches and has the correct casing. */
+    /** Whether the existing column identifier matches that of the defined column and has the correct casing. */
     val caseSensitiveName: Boolean,
-    /** Whether the size and scale of the existing column, if applicable, is correct. */
+    /** Whether the size and scale of the existing column, if applicable, match those of the defined column. */
     val sizeAndScale: Boolean,
 ) {
     /** Returns `true` if there is a difference between the column definition and the existing column in the database. */
diff --git a/exposed-core/src/main/kotlin/org/jetbrains/exposed/sql/vendors/PostgreSQL.kt b/exposed-core/src/main/kotlin/org/jetbrains/exposed/sql/vendors/PostgreSQL.kt
index 22b3ad0876..efb6adacf4 100644
--- a/exposed-core/src/main/kotlin/org/jetbrains/exposed/sql/vendors/PostgreSQL.kt
+++ b/exposed-core/src/main/kotlin/org/jetbrains/exposed/sql/vendors/PostgreSQL.kt
@@ -408,6 +408,11 @@ open class PostgreSQLDialect(override val name: String = dialectName) : VendorDi
                         val fallbackSequenceName = fallbackSequenceName(tableName = column.table.tableName, columnName = column.name)
                         append("ALTER COLUMN $colName SET DEFAULT nextval('$fallbackSequenceName')")
                     }
+                } else if (columnDiff.autoInc && column.autoIncColumnType == null) {
+                    // based on logic in SchemaUtils.isIncorrectAutoInc this should only be possible if the existing
+                    // column in database is auto-incrementing while defined table is not
+                    append("ALTER COLUMN $colName TYPE ${column.columnType.sqlType()}")
+                    append(", ALTER COLUMN $colName DROP DEFAULT")
                 } else {
                     append("ALTER COLUMN $colName TYPE ${column.columnType.sqlType()}")
                 }
diff --git a/exposed-tests/src/test/kotlin/org/jetbrains/exposed/sql/tests/shared/ddl/DatabaseMigrationTests.kt b/exposed-tests/src/test/kotlin/org/jetbrains/exposed/sql/tests/shared/ddl/DatabaseMigrationTests.kt
index 75304b67b4..460b336f1e 100644
--- a/exposed-tests/src/test/kotlin/org/jetbrains/exposed/sql/tests/shared/ddl/DatabaseMigrationTests.kt
+++ b/exposed-tests/src/test/kotlin/org/jetbrains/exposed/sql/tests/shared/ddl/DatabaseMigrationTests.kt
@@ -12,6 +12,7 @@ import org.jetbrains.exposed.sql.tests.inProperCase
 import org.jetbrains.exposed.sql.tests.shared.assertEqualCollections
 import org.jetbrains.exposed.sql.tests.shared.assertEqualLists
 import org.jetbrains.exposed.sql.tests.shared.assertEquals
+import org.jetbrains.exposed.sql.tests.shared.assertFalse
 import org.jetbrains.exposed.sql.tests.shared.assertTrue
 import org.jetbrains.exposed.sql.tests.shared.expectException
 import org.jetbrains.exposed.sql.vendors.MysqlDialect
@@ -374,7 +375,7 @@ class DatabaseMigrationTests : DatabaseTestsBase() {
             when (testDb) {
                 TestDB.POSTGRESQL, TestDB.POSTGRESQLNG -> {
                     assertEquals(2, statements.size)
-                    assertEquals("ALTER TABLE test_table ALTER COLUMN id TYPE BIGINT", statements[0])
+                    assertEquals("ALTER TABLE test_table ALTER COLUMN id TYPE BIGINT, ALTER COLUMN id DROP DEFAULT", statements[0])
                     assertEquals(expectedDropSequenceStatement("test_table_id_seq"), statements[1])
                 }
                 TestDB.ORACLE, TestDB.H2_V2_ORACLE -> {
@@ -731,15 +732,13 @@ class DatabaseMigrationTests : DatabaseTestsBase() {
 
                 val statements = MigrationUtils.statementsRequiredForDatabaseMigration(tableWithoutAutoIncrement)
                 assertEquals(2, statements.size)
-                assertEquals("ALTER TABLE test_table_auto ALTER COLUMN id TYPE INT", statements[0])
+                assertEquals("ALTER TABLE test_table_auto ALTER COLUMN id TYPE INT, ALTER COLUMN id DROP DEFAULT", statements[0])
                 assertEquals(expectedDropSequenceStatement("test_table_auto_id_seq"), statements[1])
 
-                // fails due to EXPOSED-696
-                // https://youtrack.jetbrains.com/issue/EXPOSED-696/PostgreSQL-Drop-of-auto-increment-sequence-fails-after-column-modified-without-dropping-default)
-//                statements.forEach { exec(it) }
-//                assertFalse(autoSeq.exists())
-//                assertTrue(sequence.exists())
-//                assertTrue(implicitSeq.exists())
+                statements.forEach { exec(it) }
+                assertFalse(autoSeq.exists())
+                assertTrue(sequence.exists())
+                assertTrue(implicitSeq.exists())
             } finally {
                 SchemaUtils.drop(tableWithAutoIncrement, tableWithExplSequence, tableWithImplSequence)
             }