diff --git a/server/src/main/java/org/opensearch/cluster/metadata/IndexMetadata.java b/server/src/main/java/org/opensearch/cluster/metadata/IndexMetadata.java
index c8ea5442a0dd0..f70282986ad4e 100644
--- a/server/src/main/java/org/opensearch/cluster/metadata/IndexMetadata.java
+++ b/server/src/main/java/org/opensearch/cluster/metadata/IndexMetadata.java
@@ -1061,7 +1061,7 @@ public XContentBuilder toXContent(XContentBuilder builder, Params params) throws
      *
      * @opensearch.internal
      */
-    private static class IndexMetadataDiff implements Diff<IndexMetadata> {
+    static class IndexMetadataDiff implements Diff<IndexMetadata> {
 
         private final String index;
         private final int routingNumShards;
@@ -1178,7 +1178,7 @@ public IndexMetadata apply(IndexMetadata part) {
             builder.customMetadata.putAll(customData.apply(part.customData));
             builder.inSyncAllocationIds.putAll(inSyncAllocationIds.apply(part.inSyncAllocationIds));
             builder.rolloverInfos.putAll(rolloverInfos.apply(part.rolloverInfos));
-            builder.system(part.isSystem);
+            builder.system(isSystem);
             builder.context(context);
             return builder.build();
         }
diff --git a/server/src/test/java/org/opensearch/cluster/metadata/IndexMetadataTests.java b/server/src/test/java/org/opensearch/cluster/metadata/IndexMetadataTests.java
index 92988ab7e9cba..a6840f213e76f 100644
--- a/server/src/test/java/org/opensearch/cluster/metadata/IndexMetadataTests.java
+++ b/server/src/test/java/org/opensearch/cluster/metadata/IndexMetadataTests.java
@@ -32,10 +32,13 @@
 
 package org.opensearch.cluster.metadata;
 
+import org.opensearch.Version;
 import org.opensearch.action.admin.indices.rollover.MaxAgeCondition;
 import org.opensearch.action.admin.indices.rollover.MaxDocsCondition;
 import org.opensearch.action.admin.indices.rollover.MaxSizeCondition;
 import org.opensearch.action.admin.indices.rollover.RolloverInfo;
+import org.opensearch.cluster.Diff;
+import org.opensearch.common.UUIDs;
 import org.opensearch.common.io.stream.BytesStreamOutput;
 import org.opensearch.common.settings.Settings;
 import org.opensearch.common.unit.TimeValue;
@@ -48,6 +51,7 @@
 import org.opensearch.core.common.io.stream.NamedWriteableRegistry;
 import org.opensearch.core.common.io.stream.StreamInput;
 import org.opensearch.core.common.unit.ByteSizeValue;
+import org.opensearch.core.index.Index;
 import org.opensearch.core.index.shard.ShardId;
 import org.opensearch.core.xcontent.MediaTypeRegistry;
 import org.opensearch.core.xcontent.NamedXContentRegistry;
@@ -88,6 +92,36 @@ protected NamedXContentRegistry xContentRegistry() {
         return new NamedXContentRegistry(IndicesModule.getNamedXContents());
     }
 
+    // Create the index metadata for a given index, with the specified version.
+    private static IndexMetadata createIndexMetadata(final Index index, final long version) {
+        final Settings settings = Settings.builder()
+            .put(IndexMetadata.SETTING_VERSION_CREATED, Version.CURRENT)
+            .put(IndexMetadata.SETTING_INDEX_UUID, index.getUUID())
+            .build();
+        return IndexMetadata.builder(index.getName())
+            .settings(settings)
+            .numberOfShards(1)
+            .numberOfReplicas(0)
+            .creationDate(System.currentTimeMillis())
+            .version(version)
+            .build();
+    }
+
+    private static IndexMetadata createIndexMetadata(final Index index, final long version, final boolean isSystem) {
+        final Settings settings = Settings.builder()
+            .put(IndexMetadata.SETTING_VERSION_CREATED, Version.CURRENT)
+            .put(IndexMetadata.SETTING_INDEX_UUID, index.getUUID())
+            .build();
+        return IndexMetadata.builder(index.getName())
+            .settings(settings)
+            .numberOfShards(1)
+            .numberOfReplicas(0)
+            .creationDate(System.currentTimeMillis())
+            .version(version)
+            .system(isSystem)
+            .build();
+    }
+
     public void testIndexMetadataSerialization() throws IOException {
         Integer numShard = randomFrom(1, 2, 4, 8, 16);
         int numberOfReplicas = randomIntBetween(0, 10);
@@ -568,4 +602,18 @@ public void testParseIndexNameCannotFormatNumber() {
         }
     }
 
+    /**
+     * Test that changes to indices metadata are applied
+     */
+    public void testIndicesMetadataDiffSystemFlagFlipped() {
+        String indexUuid = UUIDs.randomBase64UUID();
+        Index index = new Index("test-index", indexUuid);
+        IndexMetadata previousIndexMetadata = createIndexMetadata(index, 1);
+        IndexMetadata nextIndexMetadata = createIndexMetadata(index, 2, true);
+        Diff<IndexMetadata> diff = new IndexMetadata.IndexMetadataDiff(previousIndexMetadata, nextIndexMetadata);
+        IndexMetadata indexMetadataAfterDiffApplied = diff.apply(previousIndexMetadata);
+        assertTrue(indexMetadataAfterDiffApplied.isSystem());
+        assertThat(indexMetadataAfterDiffApplied.getVersion(), equalTo(nextIndexMetadata.getVersion()));
+    }
+
 }