diff --git a/changelog.d/6984.docker b/changelog.d/6984.docker
new file mode 100644
index 000000000000..84a55e1267d1
--- /dev/null
+++ b/changelog.d/6984.docker
@@ -0,0 +1 @@
+Fix `POSTGRES_INITDB_ARGS` in the `contrib/docker/docker-compose.yml` example docker-compose configuration.
diff --git a/contrib/docker/docker-compose.yml b/contrib/docker/docker-compose.yml
index 5df29379c854..453b30505339 100644
--- a/contrib/docker/docker-compose.yml
+++ b/contrib/docker/docker-compose.yml
@@ -58,7 +58,7 @@ services:
       - POSTGRES_PASSWORD=changeme
       # ensure the database gets created correctly
       # https://github.com/matrix-org/synapse/blob/master/docs/postgres.md#set-up-database
-      - POSTGRES_INITDB_ARGS="--encoding=UTF-8 --lc-collate=C --lc-ctype=C"
+      - POSTGRES_INITDB_ARGS=--encoding=UTF-8 --lc-collate=C --lc-ctype=C
     volumes:
       # You may store the database tables in a local folder..
       - ./schemas:/var/lib/postgresql/data