diff --git a/meta/classes-global/package_ipk.bbclass b/meta/classes-global/package_ipk.bbclass
index 71ffdd522a..209568ae5f 100644
--- a/meta/classes-global/package_ipk.bbclass
+++ b/meta/classes-global/package_ipk.bbclass
@@ -15,7 +15,7 @@ IPKGCONF_SDK_TARGET = "${WORKDIR}/opkg-sdk-target.conf"
 PKGWRITEDIRIPK = "${WORKDIR}/deploy-ipks"
 
 # Program to be used to build opkg packages
-OPKGBUILDCMD ??= 'opkg-build -Z xz -a "${XZ_DEFAULTS}"'
+OPKGBUILDCMD ??= 'opkg-build -Z zstd -a "${ZSTD_DEFAULTS}"'
 
 OPKG_ARGS += "--force_postinstall --prefer-arch-to-version"
 OPKG_ARGS += "${@['', '--no-install-recommends'][d.getVar("NO_RECOMMENDATIONS") == "1"]}"
@@ -277,7 +277,7 @@ addtask do_package_write_ipk_setscene
 
 python () {
     if d.getVar('PACKAGES') != '':
-        deps = ' opkg-utils-native:do_populate_sysroot virtual/fakeroot-native:do_populate_sysroot xz-native:do_populate_sysroot'
+        deps = ' opkg-utils-native:do_populate_sysroot virtual/fakeroot-native:do_populate_sysroot zstd-native:do_populate_sysroot'
         d.appendVarFlag('do_package_write_ipk', 'depends', deps)
         d.setVarFlag('do_package_write_ipk', 'fakeroot', "1")
 
diff --git a/meta/classes-recipe/image_types.bbclass b/meta/classes-recipe/image_types.bbclass
index d615b41ed1..3733bdfc20 100644
--- a/meta/classes-recipe/image_types.bbclass
+++ b/meta/classes-recipe/image_types.bbclass
@@ -63,8 +63,6 @@ ZIP_COMPRESSION_LEVEL ?= "-9"
 7ZIP_COMPRESSION_METHOD ?= "BZip2"
 7ZIP_EXTENSION ?= "7z"
 
-ZSTD_COMPRESSION_LEVEL ?= "-3"
-
 JFFS2_SUM_EXTRA_ARGS ?= ""
 IMAGE_CMD:jffs2 = "mkfs.jffs2 --root=${IMAGE_ROOTFS} --faketime --output=${IMGDEPLOYDIR}/${IMAGE_NAME}.jffs2 ${EXTRA_IMAGECMD}"
 
@@ -337,7 +335,7 @@ CONVERSION_CMD:lz4 = "lz4 -9 -z -l ${IMAGE_NAME}.${type} ${IMAGE_NAME}.${type}.l
 CONVERSION_CMD:lzo = "lzop -9 ${IMAGE_NAME}.${type}"
 CONVERSION_CMD:zip = "zip ${ZIP_COMPRESSION_LEVEL} ${IMAGE_NAME}.${type}.zip ${IMAGE_NAME}.${type}"
 CONVERSION_CMD:7zip = "7za a -mx=${7ZIP_COMPRESSION_LEVEL} -mm=${7ZIP_COMPRESSION_METHOD} ${IMAGE_NAME}.${type}.${7ZIP_EXTENSION} ${IMAGE_NAME}.${type}"
-CONVERSION_CMD:zst = "zstd -f -k -T0 -c ${ZSTD_COMPRESSION_LEVEL} ${IMAGE_NAME}.${type} > ${IMAGE_NAME}.${type}.zst"
+CONVERSION_CMD:zst = "zstd -f -k -c ${ZSTD_DEFAULTS} ${IMAGE_NAME}.${type} > ${IMAGE_NAME}.${type}.zst"
 CONVERSION_CMD:sum = "sumtool -i ${IMAGE_NAME}.${type} -o ${IMAGE_NAME}.${type}.sum ${JFFS2_SUM_EXTRA_ARGS}"
 CONVERSION_CMD:md5sum = "md5sum ${IMAGE_NAME}.${type} > ${IMAGE_NAME}.${type}.md5sum"
 CONVERSION_CMD:sha1sum = "sha1sum ${IMAGE_NAME}.${type} > ${IMAGE_NAME}.${type}.sha1sum"
diff --git a/meta/conf/bitbake.conf b/meta/conf/bitbake.conf
index 83b12cbc15..b3f1f18a0d 100644
--- a/meta/conf/bitbake.conf
+++ b/meta/conf/bitbake.conf
@@ -878,6 +878,10 @@ XZ_DEFAULTS[vardepsexclude] += "XZ_MEMLIMIT XZ_THREADS"
 ZSTD_THREADS ?= "${@oe.utils.cpu_count(at_least=2)}"
 ZSTD_THREADS[vardepvalue] = "1"
 
+ZSTD_COMPRESSION_LEVEL ?= "-3"
+ZSTD_DEFAULTS ?= "--threads=${ZSTD_THREADS} ${ZSTD_COMPRESSION_LEVEL}"
+ZSTD_DEFAULTS[vardepsexclude] = "ZSTD_THREADS"
+
 # Limit the number of threads that OpenMP libraries will use. Otherwise they
 # may fallback to using all CPUs
 export OMP_NUM_THREADS = "${BB_NUMBER_THREADS}"
diff --git a/meta/lib/oe/package_manager/ipk/__init__.py b/meta/lib/oe/package_manager/ipk/__init__.py
index e6f9c08e2b..8fcbad56aa 100644
--- a/meta/lib/oe/package_manager/ipk/__init__.py
+++ b/meta/lib/oe/package_manager/ipk/__init__.py
@@ -133,7 +133,7 @@ class OpkgDpkgPM(PackageManager):
         tmp_dir = tempfile.mkdtemp()
         current_dir = os.getcwd()
         os.chdir(tmp_dir)
-        data_tar = 'data.tar.xz'
+        data_tar = 'data.tar.zst'
 
         try:
             cmd = [ar_cmd, 'x', pkg_path]
@@ -505,6 +505,6 @@ class OpkgPM(OpkgDpkgPM):
                      "trying to extract the package."  % pkg)
 
         tmp_dir = super(OpkgPM, self).extract(pkg, pkg_info)
-        bb.utils.remove(os.path.join(tmp_dir, "data.tar.xz"))
+        bb.utils.remove(os.path.join(tmp_dir, "data.tar.zst"))
 
         return tmp_dir
diff --git a/meta/recipes-devtools/opkg/opkg_0.6.2.bb b/meta/recipes-devtools/opkg/opkg_0.6.2.bb
index b2e675ae48..71c0b44aed 100644
--- a/meta/recipes-devtools/opkg/opkg_0.6.2.bb
+++ b/meta/recipes-devtools/opkg/opkg_0.6.2.bb
@@ -8,7 +8,7 @@ LICENSE = "GPL-2.0-or-later"
 LIC_FILES_CHKSUM = "file://COPYING;md5=94d55d512a9ba36caa9b7df079bae19f \
                     file://src/opkg.c;beginline=4;endline=18;md5=d6200b0f2b41dee278aa5fad333eecae"
 
-DEPENDS = "libarchive"
+DEPENDS = "libarchive zstd"
 
 PE = "1"
 
@@ -40,10 +40,10 @@ PACKAGECONFIG[gpg] = "--enable-gpg,--disable-gpg,\
 PACKAGECONFIG[curl] = "--enable-curl,--disable-curl,curl"
 PACKAGECONFIG[ssl-curl] = "--enable-ssl-curl,--disable-ssl-curl,curl openssl"
 PACKAGECONFIG[sha256] = "--enable-sha256,--disable-sha256"
-PACKAGECONFIG[zstd] = "--enable-zstd,--disable-zstd,zstd"
 PACKAGECONFIG[libsolv] = "--with-libsolv,--without-libsolv,libsolv"
 
-EXTRA_OECONF:class-native = "--localstatedir=/${@os.path.relpath('${localstatedir}', '${STAGING_DIR_NATIVE}')} --sysconfdir=/${@os.path.relpath('${sysconfdir}', '${STAGING_DIR_NATIVE}')}"
+EXTRA_OECONF = "--enable-zstd"
+EXTRA_OECONF:append:class-native = " --localstatedir=/${@os.path.relpath('${localstatedir}', '${STAGING_DIR_NATIVE}')} --sysconfdir=/${@os.path.relpath('${sysconfdir}', '${STAGING_DIR_NATIVE}')}"
 
 do_install:append () {
 	install -d ${D}${sysconfdir}/opkg