diff --git a/README.md b/README.md
index 0ae911ddb0..ff6ad3ea77 100644
--- a/README.md
+++ b/README.md
@@ -445,7 +445,7 @@ We welcome any improvement to the standard module to make the default as secure
 | <a name="input_ghes_url"></a> [ghes\_url](#input\_ghes\_url) | GitHub Enterprise Server URL. Example: https://github.internal.co - DO NOT SET IF USING PUBLIC GITHUB | `string` | `null` | no |
 | <a name="input_github_app"></a> [github\_app](#input\_github\_app) | GitHub app parameters, see your github app. Ensure the key is the base64-encoded `.pem` file (the output of `base64 app.private-key.pem`, not the content of `private-key.pem`). | <pre>object({<br>    key_base64     = string<br>    id             = string<br>    webhook_secret = string<br>  })</pre> | n/a | yes |
 | <a name="input_idle_config"></a> [idle\_config](#input\_idle\_config) | List of time period that can be defined as cron expression to keep a minimum amount of runners active instead of scaling down to 0. By defining this list you can ensure that in time periods that match the cron expression within 5 seconds a runner is kept idle. | <pre>list(object({<br>    cron      = string<br>    timeZone  = string<br>    idleCount = number<br>  }))</pre> | `[]` | no |
-| <a name="input_instance_allocation_strategy"></a> [instance\_allocation\_strategy](#input\_instance\_allocation\_strategy) | The allocation strategy for spot instances. AWS recommends to use `capacity-optimized` however the AWS default is `lowest-price`. | `string` | `"lowest-price"` | no |
+| <a name="input_instance_allocation_strategy"></a> [instance\_allocation\_strategy](#input\_instance\_allocation\_strategy) | The allocation strategy for spot instances. AWS recommends to use `price-capacity-optimized` however the AWS default is `lowest-price`. | `string` | `"lowest-price"` | no |
 | <a name="input_instance_max_spot_price"></a> [instance\_max\_spot\_price](#input\_instance\_max\_spot\_price) | Max price price for spot intances per hour. This variable will be passed to the create fleet as max spot price for the fleet. | `string` | `null` | no |
 | <a name="input_instance_profile_path"></a> [instance\_profile\_path](#input\_instance\_profile\_path) | The path that will be added to the instance\_profile, if not set the environment name will be used. | `string` | `null` | no |
 | <a name="input_instance_target_capacity_type"></a> [instance\_target\_capacity\_type](#input\_instance\_target\_capacity\_type) | Default lifecycle used for runner instances, can be either `spot` or `on-demand`. | `string` | `"spot"` | no |
diff --git a/modules/runners/variables.tf b/modules/runners/variables.tf
index 0a1f4d3aca..fe3e521d41 100644
--- a/modules/runners/variables.tf
+++ b/modules/runners/variables.tf
@@ -109,7 +109,7 @@ variable "instance_allocation_strategy" {
   default     = "lowest-price"
 
   validation {
-    condition     = contains(["lowest-price", "diversified", "capacity-optimized", "capacity-optimized-prioritized"], var.instance_allocation_strategy)
+    condition     = contains(["lowest-price", "diversified", "capacity-optimized", "capacity-optimized-prioritized", "price-capacity-optimized"], var.instance_allocation_strategy)
     error_message = "The instance allocation strategy does not match the allowed values."
   }
 }
diff --git a/variables.tf b/variables.tf
index 7948eeccfb..2672082468 100644
--- a/variables.tf
+++ b/variables.tf
@@ -451,11 +451,11 @@ variable "instance_target_capacity_type" {
 }
 
 variable "instance_allocation_strategy" {
-  description = "The allocation strategy for spot instances. AWS recommends to use `capacity-optimized` however the AWS default is `lowest-price`."
+  description = "The allocation strategy for spot instances. AWS recommends to use `price-capacity-optimized` however the AWS default is `lowest-price`."
   type        = string
   default     = "lowest-price"
   validation {
-    condition     = contains(["lowest-price", "diversified", "capacity-optimized", "capacity-optimized-prioritized"], var.instance_allocation_strategy)
+    condition     = contains(["lowest-price", "diversified", "capacity-optimized", "capacity-optimized-prioritized", "price-capacity-optimized"], var.instance_allocation_strategy)
     error_message = "The instance allocation strategy does not match the allowed values."
   }
 }