diff --git a/internal/pkg/otel/translate/otelconfig.go b/internal/pkg/otel/translate/otelconfig.go
index 4081e373fbc..3c67b0fa269 100644
--- a/internal/pkg/otel/translate/otelconfig.go
+++ b/internal/pkg/otel/translate/otelconfig.go
@@ -551,6 +551,15 @@ func getBeatsAuthExtensionConfig(outputCfg *config.C) (map[string]any, error) {
 		return nil, err
 	}
 
+	// proxy_url on newConfig is of type url.URL. Beatsauth extension expects it to be of string type instead
+	// this logic here converts url.URL to string type similar to what a user would set on filebeat config
+	if defaultTransportSettings.Proxy.URL != nil {
+		err = newConfig.SetString("proxy_url", -1, defaultTransportSettings.Proxy.URL.String())
+		if err != nil {
+			return nil, fmt.Errorf("error settingg proxy url:%w ", err)
+		}
+	}
+
 	var newMap map[string]any
 	err = newConfig.Unpack(&newMap)
 	if err != nil {
diff --git a/internal/pkg/otel/translate/otelconfig_test.go b/internal/pkg/otel/translate/otelconfig_test.go
index 5ad1b411cd0..258ba3eda65 100644
--- a/internal/pkg/otel/translate/otelconfig_test.go
+++ b/internal/pkg/otel/translate/otelconfig_test.go
@@ -225,6 +225,7 @@ func TestGetOtelConfig(t *testing.T) {
 			"preset":           "balanced",
 			"queue.mem.events": 3200,
 			"ssl.enabled":      true,
+			"proxy_url":        "https://example.com",
 		}
 
 		for _, v := range extra {
@@ -238,6 +239,7 @@ func TestGetOtelConfig(t *testing.T) {
 			"continue_on_error":       true,
 			"idle_connection_timeout": "3s",
 			"proxy_disable":           false,
+			"proxy_url":               "https://example.com",
 			"ssl": map[string]interface{}{
 				"ca_sha256":               []interface{}{},
 				"ca_trusted_fingerprint":  "",
diff --git a/internal/pkg/otel/translate/output_elasticsearch.go b/internal/pkg/otel/translate/output_elasticsearch.go
index f3b6960431d..4b3c1df0020 100644
--- a/internal/pkg/otel/translate/output_elasticsearch.go
+++ b/internal/pkg/otel/translate/output_elasticsearch.go
@@ -8,6 +8,7 @@ import (
 	"encoding/base64"
 	"errors"
 	"fmt"
+	"net/url"
 	"reflect"
 	"strings"
 	"time"
@@ -20,6 +21,7 @@ import (
 	"github.com/elastic/beats/v7/libbeat/publisher/queue/memqueue"
 	"github.com/elastic/elastic-agent-libs/config"
 	"github.com/elastic/elastic-agent-libs/logp"
+	"github.com/elastic/elastic-agent-libs/transport/httpcommon"
 	"github.com/elastic/elastic-agent-libs/transport/tlscommon"
 )
 
@@ -256,6 +258,12 @@ func cfgDecodeHookFunc() mapstructure.DecodeHookFunc {
 				return nil, fmt.Errorf("failed parsing TLS verification mode: %w", err)
 			}
 			return verificationMode, nil
+		case t == reflect.TypeOf(httpcommon.ProxyURI(url.URL{})):
+			proxyURL := httpcommon.ProxyURI(url.URL{})
+			if err := proxyURL.Unpack(data.(string)); err != nil {
+				return nil, fmt.Errorf("failed parsing proxy_url: %w", err)
+			}
+			return proxyURL, nil
 		default:
 			return data, nil
 		}