diff --git a/doc/source/admin/pci-passthrough.rst b/doc/source/admin/pci-passthrough.rst
index 764922d044..df4aa87e64 100644
--- a/doc/source/admin/pci-passthrough.rst
+++ b/doc/source/admin/pci-passthrough.rst
@@ -367,6 +367,13 @@ resource class can be customized via the ``resource_class`` tag in the
 tag in that configuration that allows specifying a list of placement traits to
 be added to the resource provider representing the matching PCI devices.
 
+.. note::
+   In nova 26.0.0 (Zed) the Placement resource tracking of PCI devices does not
+   support SR-IOV devices intended to be consumed via Neutron ports and
+   therefore having ``physical_network`` tag in
+   :oslo.config:option:`pci.device_spec`. Such devices are supported via the
+   legacy PCI tracker code path in Nova.
+
 .. note::
    Having different resource class or traits configuration for VFs under the
    same parent PF is not supported and the nova-compute service will refuse to
diff --git a/nova/compute/pci_placement_translator.py b/nova/compute/pci_placement_translator.py
index 49d853b5fa..b0ad6ba4ae 100644
--- a/nova/compute/pci_placement_translator.py
+++ b/nova/compute/pci_placement_translator.py
@@ -231,6 +231,13 @@ class PlacementView:
     def add_dev(
         self, dev: pci_device.PciDevice, dev_spec_tags: ty.Dict[str, str]
     ) -> None:
+        if dev_spec_tags.get("physical_network"):
+            # NOTE(gibi): We ignore devices that has physnet configured as
+            # those are there for Neutron based SRIOV and that is out of scope
+            # for now. Later these devices will be tracked as PCI_NETDEV
+            # devices in placement.
+            return
+
         if dev.dev_type in PARENT_TYPES:
             self._add_parent(dev, dev_spec_tags)
         elif dev.dev_type in CHILD_TYPES:
diff --git a/nova/tests/functional/libvirt/test_pci_in_placement.py b/nova/tests/functional/libvirt/test_pci_in_placement.py
index e731b123ba..c62f433a2b 100644
--- a/nova/tests/functional/libvirt/test_pci_in_placement.py
+++ b/nova/tests/functional/libvirt/test_pci_in_placement.py
@@ -284,3 +284,28 @@ class PlacementPCIReportingTests(test_pci_sriov_servers._PCIServersTestBase):
             "and CUSTOM_FOO for 0000:81:00.1.",
             str(ex)
         )
+
+    def test_neutron_sriov_devs_ignored(self):
+        # The fake libvirt will emulate on the host:
+        # * one type-PF dev in slot 0 with one type-VF under it
+        pci_info = fakelibvirt.HostPCIDevicesInfo(
+            num_pci=0, num_pfs=1, num_vfs=1)
+        # then the config assigns physnet to the dev
+        device_spec = self._to_device_spec_conf(
+            [
+                {
+                    "vendor_id": fakelibvirt.PCI_VEND_ID,
+                    "product_id": fakelibvirt.PF_PROD_ID,
+                    "physical_network": "physnet0",
+                },
+            ]
+        )
+        self.flags(group='pci', device_spec=device_spec)
+        self.start_compute(hostname="compute1", pci_info=pci_info)
+
+        # As every matching dev has physnet configured they are ignored
+        self.assert_placement_pci_view(
+            "compute1",
+            inventories={},
+            traits={},
+        )