diff --git a/deploy/template/docker-compose.yml.sh b/deploy/template/docker-compose.yml.sh
index 35053ca08f..13b763f5fb 100644
--- a/deploy/template/docker-compose.yml.sh
+++ b/deploy/template/docker-compose.yml.sh
@@ -61,10 +61,8 @@ services:
     image: mongo:4.4.6
     expose:
       - "27017"
-    environment:
-      - MONGO_INITDB_DATABASE=$mongo_database
-      - MONGO_INITDB_ROOT_USERNAME=$mongo_root_user
-      - MONGO_INITDB_ROOT_PASSWORD=$mongo_root_password
+    env_file:
+      - ./docker.env
     volumes:
       - ./data/mongo/db:/data/db
       - ./data/mongo/init.js:/docker-entrypoint-initdb.d/init.js:ro
diff --git a/deploy/template/docker.env.sh b/deploy/template/docker.env.sh
index d1561b8902..8de001c485 100644
--- a/deploy/template/docker.env.sh
+++ b/deploy/template/docker.env.sh
@@ -40,7 +40,10 @@ APPSMITH_MAIL_ENABLED=false
 
 # ******** Database *************
 APPSMITH_REDIS_URL=redis://redis:6379
-APPSMITH_MONGODB_URI=mongodb://$encoded_mongo_root_user:$encoded_mongo_root_password@$mongo_host/appsmith?retryWrites=true
+APPSMITH_MONGODB_URI=mongodb://$encoded_mongo_root_user:$encoded_mongo_root_password@$mongo_host/$mongo_database?retryWrites=true
+MONGO_INITDB_DATABASE=$mongo_database
+MONGO_INITDB_ROOT_USERNAME=$mongo_root_user
+MONGO_INITDB_ROOT_PASSWORD=$mongo_root_password
 # *******************************
 
 # *** EE Specific Config ********