diff --git a/lib_com/options.h b/lib_com/options.h
index 6d97909f18b4173d46f2b1a00701f1fd7613292e..1ef054819594d418c3deae10230ce406356608fc 100644
--- a/lib_com/options.h
+++ b/lib_com/options.h
@@ -153,6 +153,8 @@
 
 #define SBA2MONO                                        /* FhG: Issue 365: Adapt processing of SBA mono output to be in line with stereo output (less delay, lower complexity) */
 
+#define NOKIA_PARAMBIN_REQULARIZATION                   /* Nokia: Contribution - Configured reqularization factor for parametric binauralizer. */
+
 /* ################## End DEVELOPMENT switches ######################### */
 /* clang-format on */
 #endif
diff --git a/lib_rend/ivas_dirac_dec_binaural_functions.c b/lib_rend/ivas_dirac_dec_binaural_functions.c
index 58de4819e8f1eb2453dc194dad8ed08edb1ff247..b27462d649c10dd186579b1df38858e971beba27 100644
--- a/lib_rend/ivas_dirac_dec_binaural_functions.c
+++ b/lib_rend/ivas_dirac_dec_binaural_functions.c
@@ -80,6 +80,9 @@ static void matrixMul( float Are[BINAURAL_CHANNELS][BINAURAL_CHANNELS], float Ai
 
 static void matrixTransp2Mul( float Are[BINAURAL_CHANNELS][BINAURAL_CHANNELS], float Aim[BINAURAL_CHANNELS][BINAURAL_CHANNELS], float Bre[BINAURAL_CHANNELS][BINAURAL_CHANNELS], float Bim[BINAURAL_CHANNELS][BINAURAL_CHANNELS], float outRe[BINAURAL_CHANNELS][BINAURAL_CHANNELS], float outIm[BINAURAL_CHANNELS][BINAURAL_CHANNELS] );
 
+#ifdef NOKIA_PARAMBIN_REQULARIZATION
+static float configure_reqularization_factor( const IVAS_FORMAT ivas_format, const int32_t ivas_brate );
+#endif
 
 /*-------------------------------------------------------------------------
  * ivas_dirac_dec_init_binaural_data()
@@ -268,6 +271,10 @@ ivas_error ivas_dirac_dec_init_binaural_data(
         ivas_td_decorr_dec_close( &( hBinaural->hTdDecorr ) );
     }
 
+#ifdef NOKIA_PARAMBIN_REQULARIZATION
+    hBinaural->reqularizationFactor = configure_reqularization_factor( st_ivas->ivas_format, st_ivas->hDecoderConfig->ivas_total_brate );
+#endif
+
     st_ivas->hDiracDecBin = hBinaural;
 
     return IVAS_ERR_OK;
@@ -1064,11 +1071,19 @@ static void ivas_dirac_dec_binaural_determine_processing_matrices(
         CrEneR = 0.0f;
 
         /* Formulate main processing matrix M */
+#ifdef NOKIA_PARAMBIN_REQULARIZATION
+        formulate2x2MixingMatrix( h->ChEne[0][bin], h->ChEne[1][bin],
+                                  h->ChCrossRe[bin], h->ChCrossIm[bin],
+                                  h->ChEneOut[0][bin], h->ChEneOut[1][bin],
+                                  h->ChCrossReOut[bin], h->ChCrossImOut[bin],
+                                  prototypeMtx, Mre, Mim, h->reqularizationFactor );
+#else
         formulate2x2MixingMatrix( h->ChEne[0][bin], h->ChEne[1][bin],
                                   h->ChCrossRe[bin], h->ChCrossIm[bin],
                                   h->ChEneOut[0][bin], h->ChEneOut[1][bin],
                                   h->ChCrossReOut[bin], h->ChCrossImOut[bin],
                                   prototypeMtx, Mre, Mim, 1.0f );
+#endif
 
         /* Load estimated covariance matrix to the [2][2] matrix form */
         CxRe[0][0] = h->ChEne[0][bin];
@@ -1854,3 +1869,82 @@ static void hrtfShGetHrtf(
 
     return;
 }
+
+
+#ifdef NOKIA_PARAMBIN_REQULARIZATION
+/*-------------------------------------------------------------------------
+ * configure_reqularization_factor()
+ *
+ * Configure regularization factor for the mixing matrix generation of the
+ * parametric binauralizer using IVAS codec format and current bitrate.
+ *------------------------------------------------------------------------*/
+
+/*! r: Configured reqularization factor value to be set. */
+static float configure_reqularization_factor(
+    const IVAS_FORMAT ivas_format, /* i: IVAS codec format in use */
+    const int32_t ivas_brate )     /* i: Current IVAS bitrate     */
+{
+    float reqularizationFactor;
+    reqularizationFactor = 1.0f; /* Default value */
+
+    if ( ivas_format == MASA_FORMAT )
+    {
+        if ( ivas_brate >= IVAS_256k )
+        {
+            reqularizationFactor = 0.2f;
+        }
+        else if ( ivas_brate == IVAS_192k )
+        {
+            reqularizationFactor = 0.3f;
+        }
+        else if ( ivas_brate == IVAS_160k )
+        {
+            reqularizationFactor = 0.4f;
+        }
+        else if ( ivas_brate == IVAS_128k )
+        {
+            reqularizationFactor = 0.5f;
+        }
+        else if ( ivas_brate == IVAS_96k )
+        {
+            reqularizationFactor = 0.6f;
+        }
+        else if ( ivas_brate >= IVAS_64k )
+        {
+            reqularizationFactor = 0.8f;
+        }
+        else
+        {
+            reqularizationFactor = 1.0f;
+        }
+    }
+
+    if ( ivas_format == MC_FORMAT ) /* This is always McMASA for parametric binauralizer. */
+    {
+        if ( ivas_brate >= IVAS_96k )
+        {
+            reqularizationFactor = 0.3f;
+        }
+        else if ( ivas_brate >= IVAS_80k )
+        {
+            reqularizationFactor = 0.5f;
+        }
+        else if ( ivas_brate >= IVAS_64k )
+        {
+            reqularizationFactor = 0.7f;
+        }
+        else if ( ivas_brate >= IVAS_48k )
+        {
+            reqularizationFactor = 0.8f;
+        }
+        else
+        {
+            reqularizationFactor = 1.0f;
+        }
+    }
+
+    /* For SBA and parametric ISM, currently in default value of 1.0f. */
+
+    return reqularizationFactor;
+}
+#endif
diff --git a/lib_rend/ivas_stat_rend.h b/lib_rend/ivas_stat_rend.h
index 226b9fcd32e81717d22e647ec988414b5495e3de..c94b55f3ccb921afee07d304115ca69bc8067927 100644
--- a/lib_rend/ivas_stat_rend.h
+++ b/lib_rend/ivas_stat_rend.h
@@ -140,6 +140,9 @@ typedef struct ivas_dirac_dec_binaural_data_structure
     uint16_t useSubframeMode; /* 0 = process in 20 ms frames, 1 = process in 5 ms subframes */
     uint16_t useTdDecorr;
     ivas_td_decorr_state_t *hTdDecorr;
+#ifdef NOKIA_PARAMBIN_REQULARIZATION
+    float reqularizationFactor;
+#endif
 
 } DIRAC_DEC_BIN_DATA, *DIRAC_DEC_BIN_HANDLE;