diff --git a/clang/tools/clang-offload-wrapper/ClangOffloadWrapper.cpp b/clang/tools/clang-offload-wrapper/ClangOffloadWrapper.cpp
index 9c84587afeb79..b82fe9e76499c 100644
--- a/clang/tools/clang-offload-wrapper/ClangOffloadWrapper.cpp
+++ b/clang/tools/clang-offload-wrapper/ClangOffloadWrapper.cpp
@@ -1108,23 +1108,23 @@ class BinaryWrapper {
         Fbin = *FBinOrErr;
       } else {
 
-        // If '--offload-compress' option is specified and zstd is not
-        // available, throw an error.
-        if (OffloadCompressDevImgs && !llvm::compression::zstd::isAvailable()) {
-          return createStringError(
-              inconvertibleErrorCode(),
-              "'--offload-compress' option is specified but zstd "
-              "is not available. The device image will not be "
-              "compressed.");
-        }
-
         // Don't compress if the user explicitly specifies the binary image
         // format or if the image is smaller than OffloadCompressThreshold
-        // bytes.
+        // bytes, or if zstd is not available.
         if (Kind != OffloadKind::SYCL || !OffloadCompressDevImgs ||
             Img.Fmt != BinaryImageFormat::none ||
             !llvm::compression::zstd::isAvailable() ||
             static_cast<int>(Bin->getBufferSize()) < OffloadCompressThreshold) {
+          // If '--offload-compress' option is specified and zstd is not
+          // available, throw an error.
+          if (OffloadCompressDevImgs &&
+              !llvm::compression::zstd::isAvailable()) {
+            errs() << "'--offload-compress' option is specified but zstd "
+                      "is not available. The device image will not be "
+                      "compressed."
+                   << "\n";
+          }
+
           Fbin = addDeviceImageToModule(
               ArrayRef<char>(Bin->getBufferStart(), Bin->getBufferSize()),
               Twine(OffloadKindTag) + Twine(ImgId) + Twine(".data"), Kind,
diff --git a/sycl/test-e2e/Compression/no_zstd_warning.cpp b/sycl/test-e2e/Compression/no_zstd_warning.cpp
index c87f2fe480096..21ce1f14f0916 100644
--- a/sycl/test-e2e/Compression/no_zstd_warning.cpp
+++ b/sycl/test-e2e/Compression/no_zstd_warning.cpp
@@ -1,4 +1,4 @@
-// using --offload-compress without zstd should throw an error.
+// using --offload-compress without zstd should throw a warning.
 // REQUIRES: !zstd
-// RUN: not %{build} %O0 -g --offload-compress %S/Inputs/single_kernel.cpp -o %t_compress.out 2>&1 | FileCheck %s
+// RUN: %{build} %O0 -g --offload-compress %S/Inputs/single_kernel.cpp -o %t_compress.out 2>&1 | FileCheck %s
 // CHECK: '--offload-compress' option is specified but zstd is not available. The device image will not be compressed.