diff --git a/doc/nrf/releases_and_maturity/releases/release-notes-changelog.rst b/doc/nrf/releases_and_maturity/releases/release-notes-changelog.rst
index 34252a3fb285..f62a13cb41e5 100644
--- a/doc/nrf/releases_and_maturity/releases/release-notes-changelog.rst
+++ b/doc/nrf/releases_and_maturity/releases/release-notes-changelog.rst
@@ -312,7 +312,9 @@ Keys samples
 Matter samples
 --------------
 
-|no_changes_yet_note|
+* :ref:`matter_template_sample` sample:
+
+  * Updated the internal configuration for :ref:`zephyr:nrf54l15dk_nrf54l15` target to use the DFU image compression and provide more memory space for the application.
 
 Networking samples
 ------------------
diff --git a/samples/matter/template/README.rst b/samples/matter/template/README.rst
index 6c90b2c18854..aea1c14f145c 100644
--- a/samples/matter/template/README.rst
+++ b/samples/matter/template/README.rst
@@ -135,13 +135,13 @@ Device Firmware Upgrade support
 
 Alternatively, for the nRF54L15 DK, the DFU can be configured to only use the internal MRAM for storage.
 This means that both the currently running firmware and the new firmware to be updated will be stored within the device's internal flash memory.
-This configuration is only available for the :ref:`release configuration <matter_template_custom_configs>`.
+This configuration is by default available for the :ref:`debug configuration <matter_template_custom_configs>`.
 
 The following is an example command to build the sample on the nRF54L15 DK with support for Matter OTA DFU and DFU over Bluetooth® SMP, and using internal MRAM only:
 
 .. code-block:: console
 
-    west build -p -b nrf54l15dk/nrf54l15/cpuapp -- -DFILE_SUFFIX=release -DCONFIG_CHIP_DFU_OVER_BT_SMP=y -DPM_STATIC_YML_FILE=pm_static_nrf54l15dk_nrf54l15_cpuapp_internal.yml -Dmcuboot_EXTRA_CONF_FILE=<absolute_path_to_the_template_sample>/sysbuild/mcuboot/boards/nrf54l15dk_nrf54l15_cpuapp_internal.conf -Dmcuboot_EXTRA_DTC_OVERLAY_FILE=<absolute_path_to_the_template_sample>/sysbuild/mcuboot/boards/nrf54l15dk_nrf54l15_cpuapp_internal.overlay
+    west build -p -b nrf54l15dk/nrf54l15/cpuapp -- -DCONFIG_CHIP_DFU_OVER_BT_SMP=y -DPM_STATIC_YML_FILE=pm_static_nrf54l15dk_nrf54l15_cpuapp_internal.yml -Dmcuboot_EXTRA_CONF_FILE=<absolute_path_to_the_template_sample>/sysbuild/mcuboot/boards/nrf54l15dk_nrf54l15_cpuapp_internal.conf -Dmcuboot_EXTRA_DTC_OVERLAY_FILE=<absolute_path_to_the_template_sample>/sysbuild/mcuboot/boards/nrf54l15dk_nrf54l15_cpuapp_internal.overlay
 
 Note that in this case, the size of the application partition is half of what it would be when using a configuration with external flash memory support.
 
diff --git a/samples/matter/template/boards/nrf54l15dk_nrf54l15_cpuapp_internal.conf b/samples/matter/template/boards/nrf54l15dk_nrf54l15_cpuapp_internal.conf
index 28743cf2e3f7..5a9bff26e66b 100644
--- a/samples/matter/template/boards/nrf54l15dk_nrf54l15_cpuapp_internal.conf
+++ b/samples/matter/template/boards/nrf54l15dk_nrf54l15_cpuapp_internal.conf
@@ -20,32 +20,6 @@ CONFIG_NVS=n
 # Disable SPI
 CONFIG_CHIP_SPI_NOR=n
 
-# Release Configuration
-
-# Enable system reset on fatal error
-CONFIG_RESET_ON_FATAL_ERROR=y
-
-# Disable all debug features
-CONFIG_NCS_SAMPLE_MATTER_TEST_SHELL=n
-CONFIG_CHIP_LIB_SHELL=n
-CONFIG_THREAD_NAME=n
-CONFIG_MPU_STACK_GUARD=n
-CONFIG_CHIP_LIB_SHELL=n
-CONFIG_USE_SEGGER_RTT=n
-CONFIG_SHELL=n
-CONFIG_OPENTHREAD_SHELL=n
-CONFIG_CONSOLE=n
-CONFIG_UART_CONSOLE=n
-CONFIG_SERIAL=n
-CONFIG_LOG=n
-CONFIG_LOG_MODE_MINIMAL=n
-CONFIG_ASSERT_VERBOSE=n
-CONFIG_ASSERT_NO_FILE_INFO=y
-CONFIG_PRINTK=n
-CONFIG_PRINTK_SYNC=n
-CONFIG_THREAD_NAME=n
-CONFIG_BOOT_BANNER=n
-
 # Enable Watchdog
 CONFIG_NCS_SAMPLE_MATTER_WATCHDOG=y
 
diff --git a/samples/matter/template/pm_static_nrf54l15dk_nrf54l15_cpuapp_internal.yml b/samples/matter/template/pm_static_nrf54l15dk_nrf54l15_cpuapp_internal.yml
index 98b2224f68f7..1b34a86cb297 100644
--- a/samples/matter/template/pm_static_nrf54l15dk_nrf54l15_cpuapp_internal.yml
+++ b/samples/matter/template/pm_static_nrf54l15dk_nrf54l15_cpuapp_internal.yml
@@ -1,46 +1,46 @@
 mcuboot:
   address: 0x0
   region: flash_primary
-  size: 0x7000
+  size: 0xa000
 mcuboot_pad:
-  address: 0x7000
+  address: 0xa000
   region: flash_primary
   size: 0x800
 app:
-  address: 0x7800
+  address: 0xa800
   region: flash_primary
-  size: 0xb4800
+  size: 0xd6800
 mcuboot_primary:
-  address: 0x7000
+  address: 0xa000
   orig_span: &id001
   - app
   - mcuboot_pad
   region: flash_primary
-  size: 0xb5000
+  size: 0xd7000
   span: *id001
 mcuboot_primary_app:
-  address: 0x7800
+  address: 0xa800
   orig_span: &id002
   - app
   region: flash_primary
-  size: 0xb4800
+  size: 0xd6800
   span: *id002
 mcuboot_secondary:
-  address: 0xbc000
+  address: 0xe1000
   orig_span: &id003
   - mcuboot_secondary_pad
   - mcuboot_secondary_app
   region: flash_primary
-  size: 0xb5000
+  size: 0x90000
   span: *id003
 mcuboot_secondary_pad:
   region: flash_primary
-  address: 0xbc000
+  address: 0xe1000
   size: 0x800
 mcuboot_secondary_app:
   region: flash_primary
-  address: 0xbc800
-  size: 0xb4800
+  address: 0xe1800
+  size: 0x8f800
 factory_data:
   address: 0x171000
   region: flash_primary
diff --git a/samples/matter/template/sysbuild_internal.conf b/samples/matter/template/sysbuild_internal.conf
index 0ed79207df2d..ea4e5b8487f1 100644
--- a/samples/matter/template/sysbuild_internal.conf
+++ b/samples/matter/template/sysbuild_internal.conf
@@ -7,3 +7,7 @@
 SB_CONFIG_MATTER=y
 SB_CONFIG_PM_OVERRIDE_EXTERNAL_DRIVER_CHECK=n
 SB_CONFIG_PM_EXTERNAL_FLASH_MCUBOOT_SECONDARY=n
+
+# Enable the DFU image compression.
+SB_CONFIG_MCUBOOT_MODE_OVERWRITE_ONLY=y
+SB_CONFIG_MCUBOOT_COMPRESSED_IMAGE_SUPPORT=y