diff --git a/pkg/controllers/proxy/network_services_controller.go b/pkg/controllers/proxy/network_services_controller.go
index bca0e30fa..aaf8015fc 100644
--- a/pkg/controllers/proxy/network_services_controller.go
+++ b/pkg/controllers/proxy/network_services_controller.go
@@ -978,10 +978,11 @@ func (nsc *NetworkServicesController) buildServicesInfo() serviceInfoMap {
 			svcInfo.extTrafficPolicy = &svc.Spec.ExternalTrafficPolicy
 
 			// The kube-router.io/service.local annotation has the ability to override the internal and external traffic
-			// policy that is set in the spec. In this case we set both to local when the annotation is true so that
-			// previous functionality of the annotation is best preserved.
+			// policy that is set in the spec. Previously, when this was active set both to local when the annotation is
+			// true so that previous functionality of the annotation is best preserved. However, this has proved to not
+			// be a good fit for ClusterIP traffic, so we retain cluster for internal traffic policy.
 			if svc.ObjectMeta.Annotations[svcLocalAnnotation] == "true" {
-				intTrafficPolicyLocal := v1.ServiceInternalTrafficPolicyLocal
+				intTrafficPolicyLocal := v1.ServiceInternalTrafficPolicyCluster
 				extTrafficPolicyLocal := v1.ServiceExternalTrafficPolicyLocal
 				svcInfo.intTrafficPolicy = &intTrafficPolicyLocal
 				svcInfo.extTrafficPolicy = &extTrafficPolicyLocal
diff --git a/pkg/controllers/routing/ecmp_vip.go b/pkg/controllers/routing/ecmp_vip.go
index 16f95bce4..2b9b72dcc 100644
--- a/pkg/controllers/routing/ecmp_vip.go
+++ b/pkg/controllers/routing/ecmp_vip.go
@@ -484,7 +484,7 @@ func (nrc *NetworkRoutingController) shouldAdvertiseService(svc *v1core.Service,
 
 	// If:
 	// - We are assessing the clusterIP of the service (the internally facing VIP)
-	// - The service has an internal traffic policy of "local" or the service has the service.local annotation on it
+	// - The service has an internal traffic policy of "local"
 	// - The service doesn't have any endpoints on the node we're executing on
 	// Then: return false
 	// We handle spec.internalTrafficPolicy different because it was introduced in v1.26 and may not be available in all
@@ -493,8 +493,7 @@ func (nrc *NetworkRoutingController) shouldAdvertiseService(svc *v1core.Service,
 	if svc.Spec.InternalTrafficPolicy != nil {
 		serIntTrafPol = *svc.Spec.InternalTrafficPolicy == v1core.ServiceInternalTrafficPolicyLocal
 	}
-	intLocalPol := (serIntTrafPol || svc.Annotations[svcLocalAnnotation] == "true")
-	if isClusterIP && intLocalPol && !hasLocalEndpoints {
+	if isClusterIP && serIntTrafPol && !hasLocalEndpoints {
 		return false, nil
 	}
 
diff --git a/pkg/controllers/routing/ecmp_vip_test.go b/pkg/controllers/routing/ecmp_vip_test.go
index 5fa53bb60..e9011a39f 100644
--- a/pkg/controllers/routing/ecmp_vip_test.go
+++ b/pkg/controllers/routing/ecmp_vip_test.go
@@ -620,8 +620,8 @@ func Test_getVIPsForService(t *testing.T) {
 				{
 					service:       getClusterSvc(),
 					endpoints:     getNoLocalAddressesEPs(),
-					advertisedIPs: []string{},
-					withdrawnIPs:  []string{"10.0.0.1"},
+					advertisedIPs: []string{"10.0.0.1"},
+					withdrawnIPs:  []string{},
 					annotations: map[string]string{
 						svcLocalAnnotation: "true",
 					},
@@ -629,8 +629,8 @@ func Test_getVIPsForService(t *testing.T) {
 				{
 					service:       getExternalSvc(),
 					endpoints:     getNoLocalAddressesEPs(),
-					advertisedIPs: []string{},
-					withdrawnIPs:  []string{"10.0.0.1", "1.1.1.1"},
+					advertisedIPs: []string{"10.0.0.1"},
+					withdrawnIPs:  []string{"1.1.1.1"},
 					annotations: map[string]string{
 						svcLocalAnnotation: "true",
 					},
@@ -638,8 +638,8 @@ func Test_getVIPsForService(t *testing.T) {
 				{
 					service:       getNodePortSvc(),
 					endpoints:     getNoLocalAddressesEPs(),
-					advertisedIPs: []string{},
-					withdrawnIPs:  []string{"10.0.0.1", "1.1.1.1"},
+					advertisedIPs: []string{"10.0.0.1"},
+					withdrawnIPs:  []string{"1.1.1.1"},
 					annotations: map[string]string{
 						svcLocalAnnotation: "true",
 					},
@@ -647,8 +647,8 @@ func Test_getVIPsForService(t *testing.T) {
 				{
 					service:       getLoadBalancerSvc(),
 					endpoints:     getNoLocalAddressesEPs(),
-					advertisedIPs: []string{},
-					withdrawnIPs:  []string{"10.0.0.1", "1.1.1.1", "10.0.255.1", "10.0.255.2"},
+					advertisedIPs: []string{"10.0.0.1"},
+					withdrawnIPs:  []string{"1.1.1.1", "10.0.255.1", "10.0.255.2"},
 					annotations: map[string]string{
 						svcLocalAnnotation: "true",
 					},
@@ -672,8 +672,8 @@ func Test_getVIPsForService(t *testing.T) {
 				{
 					service:       getClusterSvc(),
 					endpoints:     getNoLocalAddressesEPs(),
-					advertisedIPs: []string{},
-					withdrawnIPs:  []string{"10.0.0.1"},
+					advertisedIPs: []string{"10.0.0.1"},
+					withdrawnIPs:  []string{},
 					annotations: map[string]string{
 						svcLocalAnnotation: "true",
 					},
@@ -681,8 +681,8 @@ func Test_getVIPsForService(t *testing.T) {
 				{
 					service:       getExternalSvc(),
 					endpoints:     getNoLocalAddressesEPs(),
-					advertisedIPs: []string{},
-					withdrawnIPs:  []string{"10.0.0.1", "1.1.1.1"},
+					advertisedIPs: []string{"10.0.0.1"},
+					withdrawnIPs:  []string{"1.1.1.1"},
 					annotations: map[string]string{
 						svcLocalAnnotation: "true",
 					},
@@ -690,8 +690,8 @@ func Test_getVIPsForService(t *testing.T) {
 				{
 					service:       getNodePortSvc(),
 					endpoints:     getNoLocalAddressesEPs(),
-					advertisedIPs: []string{},
-					withdrawnIPs:  []string{"10.0.0.1", "1.1.1.1"},
+					advertisedIPs: []string{"10.0.0.1"},
+					withdrawnIPs:  []string{"1.1.1.1"},
 					annotations: map[string]string{
 						svcLocalAnnotation: "true",
 					},
@@ -699,8 +699,8 @@ func Test_getVIPsForService(t *testing.T) {
 				{
 					service:       getLoadBalancerSvc(),
 					endpoints:     getNoLocalAddressesEPs(),
-					advertisedIPs: []string{},
-					withdrawnIPs:  []string{"10.0.0.1", "1.1.1.1", "10.0.255.1", "10.0.255.2"},
+					advertisedIPs: []string{"10.0.0.1"},
+					withdrawnIPs:  []string{"1.1.1.1", "10.0.255.1", "10.0.255.2"},
 					annotations: map[string]string{
 						svcLocalAnnotation: "true",
 					},