diff --git a/plugins/woocommerce-admin/webpack.config.js b/plugins/woocommerce-admin/webpack.config.js
index 2ea057f74d2..f6792840dab 100644
--- a/plugins/woocommerce-admin/webpack.config.js
+++ b/plugins/woocommerce-admin/webpack.config.js
@@ -129,7 +129,7 @@ const webpackConfig = {
 			{ test: /\.md$/, use: 'raw-loader' },
 			{
 				test: /\.(png|jpe?g|gif|svg|eot|ttf|woff|woff2)$/,
-				loader: 'url-loader',
+				type: 'asset',
 			},
 			...styleConfig.rules,
 		],
diff --git a/plugins/woocommerce/changelog/dev-webpack-asset-modules b/plugins/woocommerce/changelog/dev-webpack-asset-modules
new file mode 100644
index 00000000000..9715c602b6c
--- /dev/null
+++ b/plugins/woocommerce/changelog/dev-webpack-asset-modules
@@ -0,0 +1,4 @@
+Significance: minor
+Type: dev
+
+change webpack config to use asset modules instead of custom loaders