diff --git a/Dockerfile b/Dockerfile
index 0f01dcf0..91c4ffc0 100644
--- a/Dockerfile
+++ b/Dockerfile
@@ -8,7 +8,7 @@ ENV GITLAB_VERSION=${VERSION} \
     GITLAB_SHELL_VERSION=12.2.0 \
     GITLAB_WORKHORSE_VERSION=8.25.2 \
     GITLAB_PAGES_VERSION=1.17.0 \
-    GITALY_SERVER_VERSION=12.10.0 \
+    GITALY_SERVER_VERSION=12.10.4 \
     GITLAB_USER="git" \
     GITLAB_HOME="/home/git" \
     GITLAB_LOG_DIR="/var/log/gitlab" \
diff --git a/assets/build/install.sh b/assets/build/install.sh
index 4f94863d..8b7fbe02 100755
--- a/assets/build/install.sh
+++ b/assets/build/install.sh
@@ -266,6 +266,19 @@ ${GITLAB_LOG_DIR}/gitlab-shell/*.log {
 }
 EOF
 
+# configure gitlab log rotation
+cat > /etc/logrotate.d/gitaly <<EOF
+${GITLAB_LOG_DIR}/gitaly/*.log {
+  weekly
+  missingok
+  rotate 52
+  compress
+  delaycompress
+  notifempty
+  copytruncate
+}
+EOF
+
 # configure gitlab vhost log rotation
 cat > /etc/logrotate.d/gitlab-nginx <<EOF
 ${GITLAB_LOG_DIR}/nginx/*.log {
diff --git a/assets/runtime/config/gitaly/config.toml b/assets/runtime/config/gitaly/config.toml
index 6e18163c..6aa63be7 100644
--- a/assets/runtime/config/gitaly/config.toml
+++ b/assets/runtime/config/gitaly/config.toml
@@ -45,9 +45,9 @@ path = "{{GITLAB_REPOS_DIR}}"
 #
 
 # # You can optionally configure Gitaly to output JSON-formatted log messages to stdout
-# [logging]
+[logging]
 # # The directory where Gitaly stores extra log files
-dir = "{{GITLAB_LOG_DIR}}"
+dir = "{{GITLAB_LOG_DIR}}/gitaly"
 # format = "json"
 # # Optional: Set log level to only log entries with that severity or above
 # # One of, in order: debug, info, warn, errror, fatal, panic
diff --git a/assets/runtime/functions b/assets/runtime/functions
index 9a4d2986..1a033570 100644
--- a/assets/runtime/functions
+++ b/assets/runtime/functions
@@ -1347,6 +1347,10 @@ initialize_logdir() {
   mkdir -p ${GITLAB_LOG_DIR}/gitlab-shell
   chmod -R 0755 ${GITLAB_LOG_DIR}/gitlab-shell
   chown -R ${GITLAB_USER}: ${GITLAB_LOG_DIR}/gitlab-shell
+
+  mkdir -p ${GITLAB_LOG_DIR}/gitaly
+  chmod -R 0755 ${GITLAB_LOG_DIR}/gitaly
+  chown -R ${GITLAB_USER}: ${GITLAB_LOG_DIR}/gitaly
 }
 
 initialize_datadir() {