diff --git a/VERSION b/VERSION
index 884e9604..7e4a1960 100644
--- a/VERSION
+++ b/VERSION
@@ -1 +1 @@
-0.17.3
+0.17.4-rc1
diff --git a/release-notes.md b/release-notes.md
index 4783385d..8f19d489 100644
--- a/release-notes.md
+++ b/release-notes.md
@@ -1,5 +1,11 @@
 # Notes / Changes in various releases
 
+## Zephyr SDK 0.17.4-rc1
+
+- picolibc:
+
+  * Synced Picolibc with the Zephyr 4.2 Picolibc module.
+
 ## Zephyr SDK 0.17.3
 
 - picolibc: