diff --git a/docker/Dockerfile.xpu b/docker/Dockerfile.xpu
index 4e6ef8f5ca13c..5d5b82c4fa5af 100644
--- a/docker/Dockerfile.xpu
+++ b/docker/Dockerfile.xpu
@@ -14,6 +14,7 @@ RUN apt clean && apt-get update -y && \
     libxext6 \
     libgl1 \
     lsb-release \
+    libaio-dev \
     numactl \
     wget \
     vim \
@@ -68,8 +69,8 @@ RUN --mount=type=cache,target=/root/.cache/pip \
 RUN python3 -m pip install -e tests/vllm_test_utils
 
 # install nixl from source code
+ENV NIXL_VERSION=0.7.0
 RUN python3 /workspace/vllm/tools/install_nixl_from_source_ubuntu.py
-ENV LD_LIBRARY_PATH="$LD_LIBRARY_PATH:/usr/local/lib/python3.12/dist-packages/.nixl.mesonpy.libs/plugins/"
 
 RUN --mount=type=cache,target=/root/.cache/pip \
     pip uninstall oneccl oneccl-devel -y
diff --git a/tools/install_nixl_from_source_ubuntu.py b/tools/install_nixl_from_source_ubuntu.py
index 4a20b6b7bb8fb..a786abba95ad9 100644
--- a/tools/install_nixl_from_source_ubuntu.py
+++ b/tools/install_nixl_from_source_ubuntu.py
@@ -175,6 +175,7 @@ def build_and_install_prerequisites(args):
     build_env["LD_LIBRARY_PATH"] = (
         f"{ucx_lib_path}:{ucx_plugin_path}:{existing_ld_path}".strip(":")
     )
+    build_env["LDFLAGS"] = "-Wl,-rpath,$ORIGIN"
     print(f"--> Using LD_LIBRARY_PATH: {build_env['LD_LIBRARY_PATH']}", flush=True)
 
     temp_wheel_dir = os.path.join(ROOT_DIR, "temp_wheelhouse")