diff --git a/doc/release_notes.rst b/doc/release_notes.rst
index ada70ec6..8cecfcd4 100644
--- a/doc/release_notes.rst
+++ b/doc/release_notes.rst
@@ -29,7 +29,7 @@ Version 0.9.1
 * ``Model.remove_variables`` no longer raises an ``IndexError`` on a quadratic objective. A quadratic term is dropped when any of its factors uses the removed variable. (`#883 <https://github.com/PyPSA/linopy/issues/883>`__, `#895 <https://github.com/PyPSA/linopy/pull/895>`__)
 * The Xpress interface no longer calls API functions deprecated in Xpress 9.8. (`#880 <https://github.com/PyPSA/linopy/pull/880>`__)
 * The ``docs`` extra no longer pins ``numpy<2``. (`#869 <https://github.com/PyPSA/linopy/pull/869>`__)
-
+* Using timezone-aware ``DatetimeIndex`` coordinates in a model no longer raises a ``ValueError``. The index is now retrieved directly via ``DataArray.to_index()`` instead of rebuilding it with ``pd.Index()``, which dropped the timezone info and failed during alignment. (`#898 <https://github.com/PyPSA/linopy/issues/898>`__)
 
 Version v0.9.0
 --------------
diff --git a/linopy/alignment.py b/linopy/alignment.py
index 13126b85..541aa55a 100644
--- a/linopy/alignment.py
+++ b/linopy/alignment.py
@@ -172,9 +172,11 @@ def _coords_to_dict(
 
 
 def _as_index(coord_values: Any) -> pd.Index:
-    return (
-        coord_values if isinstance(coord_values, pd.Index) else pd.Index(coord_values)
-    )
+    if isinstance(coord_values, DataArray):
+        return coord_values.to_index()
+    if isinstance(coord_values, pd.Index):
+        return coord_values
+    return pd.Index(coord_values)
 
 
 def _as_multiindex(coord_values: Any) -> pd.MultiIndex | None:
diff --git a/test/test_alignment.py b/test/test_alignment.py
index 73d2cfdb..a6eb2b09 100644
--- a/test/test_alignment.py
+++ b/test/test_alignment.py
@@ -572,6 +572,17 @@ def test_invalid_entry_raises_typeerror(
 class TestAddVariablesCoords:
     """End-to-end: each coords / dims form sets the variable's dimensions."""
 
+    @staticmethod
+    def _datetime_coordinates(timezone: str | None) -> xr.Coordinates:
+        time = pd.date_range(
+            "2025-10-26 00:00",
+            periods=5,
+            freq="h",
+            tz=timezone,
+            name="time",
+        )
+        return xr.Coordinates({"time": time})
+
     @pytest.mark.parametrize(
         "coords, dims, expected_dims",
         [
@@ -586,6 +597,9 @@ class TestAddVariablesCoords:
             ([np.array([0, 1, 2])], None, ("dim_0",)),
             ([pd.Index([0, 1, 2])], None, ("dim_0",)),
             ([("origin", ["a", "b"]), ("dest", ["x", "y"])], None, ("origin", "dest")),
+            (_datetime_coordinates(None), None, ("time",)),
+            (_datetime_coordinates("UTC"), None, ("time",)),
+            (_datetime_coordinates("Europe/Berlin"), None, ("time",)),
         ],
         ids=[
             "tuple",
@@ -599,6 +613,9 @@ class TestAddVariablesCoords:
             "ndarray",
             "unnamed-index",
             "multiple-tuples",
+            "xarray-datetime-naive",
+            "xarray-datetime-utc",
+            "xarray-datetime-dst",
         ],
     )
     def test_coords_set_variable_dims(