diff --git a/Makefile b/Makefile
index 4813a0d4d..9b65eebc5 100644
--- a/Makefile
+++ b/Makefile
@@ -51,7 +51,7 @@ endif
 
 REGISTRY ?= gcr.io/k8s-staging-ingress-nginx
 
-BASE_IMAGE ?= k8s.gcr.io/ingress-nginx/nginx:v20210115-gba0502603@sha256:224da667cf3047998ea691e9766fedd1eab94257a39df81374bfa14536da3688
+BASE_IMAGE ?= k8s.gcr.io/ingress-nginx/nginx:v20210324-g8baef769d@sha256:fcfa3e9d1f8ec3141efedbf77cf659640f452a9c22165c78006ea462b84d06f6
 
 GOARCH=$(ARCH)
 
diff --git a/TAG b/TAG
index 69d2fe8a3..77ffefc7c 100644
--- a/TAG
+++ b/TAG
@@ -1 +1 @@
-v0.45.0-dev.0
\ No newline at end of file
+v0.46.0-dev.0
diff --git a/docs/user-guide/nginx-configuration/configmap.md b/docs/user-guide/nginx-configuration/configmap.md
index 0af29d574..d39c41ade 100755
--- a/docs/user-guide/nginx-configuration/configmap.md
+++ b/docs/user-guide/nginx-configuration/configmap.md
@@ -854,6 +854,10 @@ Specifies the endpoint to use when uploading traces to a collector. This takes p
 
 Specifies the service name to use for any traces created. _**default:**_ nginx
 
+## jaeger-propagation-format
+
+Specifies the traceparent/tracestate propagation format. _**default:**_ jaeger
+
 ## jaeger-sampler-type
 
 Specifies the sampler to be used when sampling traces. The available samplers are: const, probabilistic, ratelimiting, remote. _**default:**_ const
diff --git a/docs/user-guide/third-party-addons/opentracing.md b/docs/user-guide/third-party-addons/opentracing.md
index 1f4138250..3bef8332c 100644
--- a/docs/user-guide/third-party-addons/opentracing.md
+++ b/docs/user-guide/third-party-addons/opentracing.md
@@ -64,6 +64,9 @@ jaeger-endpoint
 # specifies the service name to use for any traces created, Default: nginx
 jaeger-service-name
 
+# specifies the traceparent/tracestate propagation format
+jaeger-propagation-format
+
 # specifies the sampler to be used when sampling traces.
 # The available samplers are: const, probabilistic, ratelimiting, remote, Default: const
 jaeger-sampler-type
diff --git a/internal/ingress/controller/config/config.go b/internal/ingress/controller/config/config.go
index 35691cb55..dcd70f9c3 100644
--- a/internal/ingress/controller/config/config.go
+++ b/internal/ingress/controller/config/config.go
@@ -562,6 +562,9 @@ type Configuration struct {
 	// Default: nginx
 	JaegerServiceName string `json:"jaeger-service-name"`
 
+	// JaegerPropagationFormat specifies the traceparent/tracestate propagation format
+	JaegerPropagationFormat string `json:"jaeger-propagation-format"`
+
 	// JaegerSamplerType specifies the sampler to be used when sampling traces.
 	// The available samplers are: const, probabilistic, ratelimiting, remote
 	// Default: const
@@ -867,6 +870,7 @@ func NewDefault() Configuration {
 		ZipkinServiceName:                      "nginx",
 		ZipkinSampleRate:                       1.0,
 		JaegerCollectorPort:                    6831,
+		JaegerPropagationFormat:                "jaeger",
 		JaegerServiceName:                      "nginx",
 		JaegerSamplerType:                      "const",
 		JaegerSamplerParam:                     "1",
diff --git a/internal/ingress/controller/nginx.go b/internal/ingress/controller/nginx.go
index cef285350..664d36b75 100644
--- a/internal/ingress/controller/nginx.go
+++ b/internal/ingress/controller/nginx.go
@@ -1033,6 +1033,7 @@ const zipkinTmpl = `{
 
 const jaegerTmpl = `{
   "service_name": "{{ .JaegerServiceName }}",
+  "propagation_format": "{{ .JaegerPropagationFormat }}",
   "sampler": {
 	"type": "{{ .JaegerSamplerType }}",
 	"param": {{ .JaegerSamplerParam }},
diff --git a/test/e2e/settings/opentracing.go b/test/e2e/settings/opentracing.go
index 498bc7a40..0fe4e62f6 100644
--- a/test/e2e/settings/opentracing.go
+++ b/test/e2e/settings/opentracing.go
@@ -17,6 +17,8 @@ limitations under the License.
 package settings
 
 import (
+	"fmt"
+	"net/http"
 	"strings"
 	"time"
 
@@ -31,8 +33,9 @@ const (
 
 	zipkinCollectorHost = "zipkin-collector-host"
 
-	jaegerCollectorHost = "jaeger-collector-host"
-	jaegerSamplerHost   = "jaeger-sampler-host"
+	jaegerCollectorHost     = "jaeger-collector-host"
+	jaegerSamplerHost       = "jaeger-sampler-host"
+	jaegerPropagationFormat = "jaeger-propagation-format"
 	// jaegerEndpoint      = "jaeger-endpoint"
 
 	datadogCollectorHost = "datadog-collector-host"
@@ -175,6 +178,36 @@ var _ = framework.IngressNginxDescribe("Configure OpenTracing", func() {
 		assert.NotContains(ginkgo.GinkgoT(), log, "Unexpected failure reloading the backend", "reloading nginx after a configmap change")
 	})
 
+	ginkgo.It("should propagate the w3c header when configured with jaeger", func() {
+		host := "jaeger-w3c"
+		config := map[string]string{}
+		config[enableOpentracing] = "true"
+		config[jaegerCollectorHost] = "127.0.0.1"
+		config[jaegerPropagationFormat] = "w3c"
+		f.SetNginxConfigMapData(config)
+
+		framework.Sleep(10 * time.Second)
+		log, err := f.NginxLogs()
+		assert.Nil(ginkgo.GinkgoT(), err, "obtaining nginx logs")
+		assert.NotContains(ginkgo.GinkgoT(), log, "Unexpected failure reloading the backend", "reloading nginx after a configmap change")
+
+		ing := framework.NewSingleIngress(host, "/", host, f.Namespace, framework.EchoService, 80, nil)
+		f.EnsureIngress(ing)
+
+		f.WaitForNginxServer(host,
+			func(server string) bool {
+				return strings.Contains(server, fmt.Sprintf("server_name %s ;", host))
+			})
+
+		f.HTTPTestClient().
+			GET("/").
+			WithHeader("Host", host).
+			Expect().
+			Status(http.StatusOK).
+			Body().
+			Match("traceparent=[0-9a-f]{2}-[0-9a-f]{32}-[0-9a-f]{16}-[0-9a-f]{2}")
+	})
+
 	/*
 		ginkgo.It("should enable opentracing using jaeger with an HTTP endpoint", func() {
 			config := map[string]string{}