diff --git a/execution_engine_testing/tests/src/test/system_contracts/auction/bids.rs b/execution_engine_testing/tests/src/test/system_contracts/auction/bids.rs
index f7e6a9ca3e..f430ea79b3 100644
--- a/execution_engine_testing/tests/src/test/system_contracts/auction/bids.rs
+++ b/execution_engine_testing/tests/src/test/system_contracts/auction/bids.rs
@@ -4653,4 +4653,16 @@ fn should_change_validator_bid_public_key() {
     .build();
 
     builder.exec(distribute_request).commit().expect_success();
+
+    let bids = builder.get_bids();
+    assert_eq!(bids.len(), 4);
+
+    let delegator = bids
+        .delegator_by_public_keys(&NON_FOUNDER_VALIDATOR_2_PK, &BID_ACCOUNT_1_PK)
+        .expect("should have account1 delegation");
+    assert!(delegator.staked_amount() > U512::from(DELEGATE_AMOUNT_1));
+    let delegator = bids
+        .delegator_by_public_keys(&NON_FOUNDER_VALIDATOR_2_PK, &BID_ACCOUNT_2_PK)
+        .expect("should have account2 delegation");
+    assert!(delegator.staked_amount() > U512::from(DELEGATE_AMOUNT_2));
 }
diff --git a/storage/src/system/auction/detail.rs b/storage/src/system/auction/detail.rs
index 079f245610..d793bcf982 100644
--- a/storage/src/system/auction/detail.rs
+++ b/storage/src/system/auction/detail.rs
@@ -282,6 +282,7 @@ pub fn create_unbonding_purse<P: Auction + ?Sized>(
 /// Attempts to apply the delegator reward to the existing stake. If the reward recipient has
 /// completely unstaked, applies it to their unbond instead. In either case, returns
 /// the purse the amount should be applied to.
+/// If the `ValidatorBid` public key was changed, attemps to fetch the current `validator_public_key`.
 pub fn distribute_delegator_rewards<P>(
     provider: &mut P,
     seigniorage_allocations: &mut Vec<SeigniorageAllocation>,
@@ -291,6 +292,11 @@ pub fn distribute_delegator_rewards<P>(
 where
     P: RuntimeProvider + StorageProvider,
 {
+    // fetch current `ValidatorBid` if public key was changed
+    let validator_bid_addr = BidAddr::from(validator_public_key);
+    let validator_bid = read_current_validator_bid(provider, &validator_bid_addr.into())?;
+    let validator_public_key = validator_bid.validator_public_key().clone();
+
     let mut delegator_payouts = Vec::new();
     for (delegator_public_key, delegator_reward) in rewards {
         let bid_key =
@@ -551,6 +557,29 @@ where
     }
 }
 
+/// Returns current `ValidatorBid` in case the public key was changed.
+pub fn read_current_validator_bid<P>(
+    provider: &mut P,
+    bid_key: &Key,
+) -> Result<Box<ValidatorBid>, Error>
+where
+    P: StorageProvider + ?Sized,
+{
+    if !bid_key.is_bid_addr_key() {
+        return Err(Error::InvalidKeyVariant);
+    }
+    if let Some(BidKind::Validator(mut validator_bid)) = provider.read_bid(bid_key)? {
+        while let Some(new_bid_bridge) = validator_bid.new_validator_bid_bridge() {
+            let validator_bid_addr =
+                BidAddr::from(new_bid_bridge.new_validator_public_key().clone());
+            validator_bid = read_validator_bid(provider, &validator_bid_addr.into())?;
+        }
+        Ok(validator_bid)
+    } else {
+        Err(Error::ValidatorNotFound)
+    }
+}
+
 pub fn read_delegator_bids<P>(
     provider: &mut P,
     validator_public_key: &PublicKey,