diff --git a/CHANGELOG.md b/CHANGELOG.md
index 0a0b272df..95341cb9e 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -14,6 +14,7 @@ and this project adheres to [Semantic Versioning](https://semver.org/spec/v2.0.0
 - Convert setup.py to pyproject.toml ([#920](https://github.com/Open-EO/openeo-python-client/issues/920))
 - Make `_DerivedFrom._from_url` more resilient against unresolvable/unparsable `derived_from` links ([#928](https://github.com/Open-EO/openeo-python-client/issues/928), eu-cdse/openeo-cdse-infra#1338)
 - `download_url()`: favor explicit HEAD status check over unhelpful auto-check ([#939](https://github.com/Open-EO/openeo-python-client/issues/939))
+- Modernize Xarray version support: remove `<2025.0.2` upper limit but require at least `2024.07.0` ([#721](https://github.com/Open-EO/openeo-python-client/issues/721))
 
 ### Removed
 
diff --git a/pyproject.toml b/pyproject.toml
index 5b8804105..97ff8d482 100644
--- a/pyproject.toml
+++ b/pyproject.toml
@@ -32,7 +32,7 @@ dependencies = [
     "requests>=2.26.0",
     "shapely>=1.6.4",
     "urllib3>=1.9.0",
-    "xarray>=0.12.3,<2025.01.2",  # TODO #721 xarray non-nanosecond support
+    "xarray>=2024.7.0",
 ]
 
 [project.optional-dependencies]
diff --git a/tests/testing/test_results.py b/tests/testing/test_results.py
index 790efcfa1..c1b737b76 100644
--- a/tests/testing/test_results.py
+++ b/tests/testing/test_results.py
@@ -374,10 +374,6 @@ def test_assert_xarray_dataset_allclose_tolerance(self, kwargs, assertion_error)
         with raises_assertion_error_or_not(message=assertion_error):
             assert_xarray_dataset_allclose(actual=actual, expected=expected, **kwargs)
 
-    @pytest.mark.skipif(
-        ComparableVersion(xarray.__version__) < "2024.07.0" and ComparableVersion(numpy.__version__) >= "2.0.0",
-        reason="This test doesn't work due to numpy 2 compatibility issue in xarray below 2024.7.0",
-    )
     def test_assert_xarray_dataset_allclose_empty_coords_handling(self):
         expected = xarray.Dataset(
             {
diff --git a/tests/udf/test_xarraydatacube.py b/tests/udf/test_xarraydatacube.py
index a36733161..bb812a675 100644
--- a/tests/udf/test_xarraydatacube.py
+++ b/tests/udf/test_xarraydatacube.py
@@ -76,6 +76,9 @@ def _build_xdc(
     """
     Build multi-dimensional XarrayDataCube containing given dimensions/coordinates
     """
+    if isinstance(ts, list) and all(isinstance(t, numpy.datetime64) for t in ts):
+        # Normalize to "ns" resolution (best compatibility with defaults across old/new versions of xarray/netCDF)
+        ts = [numpy.datetime64(t, "ns") for t in ts]
     dims = []
     coords = {}
     value = numpy.zeros(shape=())