diff --git a/packages/design-system/src/components/OcModal/OcModal.vue b/packages/design-system/src/components/OcModal/OcModal.vue
index 55d19f439d8..b657dc2aa12 100644
--- a/packages/design-system/src/components/OcModal/OcModal.vue
+++ b/packages/design-system/src/components/OcModal/OcModal.vue
@@ -43,14 +43,10 @@
               :placeholder="inputPlaceholder"
               :label="inputLabel"
               :type="inputType"
-              :password-policy="inputPasswordPolicy"
-              :generate-password-method="inputGeneratePasswordMethod"
               :description-message="inputDescription"
               :disabled="inputDisabled"
               :fix-message-line="true"
               :selection-range="inputSelectionRange"
-              @password-challenge-completed="$emit('passwordChallengeCompleted')"
-              @password-challenge-failed="$emit('passwordChallengeFailed')"
               @update:model-value="inputOnInput"
               @keydown.enter.prevent="confirm"
             />
@@ -107,7 +103,6 @@ import OcIcon from '../OcIcon/OcIcon.vue'
 import OcTextInput from '../OcTextInput/OcTextInput.vue'
 import { FocusTrap } from 'focus-trap-vue'
 import { FocusTargetOrFalse, FocusTargetValueOrFalse } from 'focus-trap'
-import { PasswordPolicy } from '../../helpers'
 
 /**
  * Modals are generally used to force the user to focus on confirming or completing a single action.
@@ -364,22 +359,6 @@ export default defineComponent({
       required: false,
       default: false
     },
-    /**
-     * Password policy for the input
-     */
-    inputPasswordPolicy: {
-      type: Object as PropType<PasswordPolicy>,
-      required: false,
-      default: () => ({})
-    },
-    /**
-     * Method to generate random password for the input
-     */
-    inputGeneratePasswordMethod: {
-      type: Function as PropType<(...args: unknown[]) => string>,
-      required: false,
-      default: null
-    },
     /**
      * Overwrite default focused element
      * Can be `#id, .class`.
@@ -397,15 +376,7 @@ export default defineComponent({
       default: false
     }
   },
-  emits: [
-    'cancel',
-    'confirm',
-    'confirm-secondary',
-    'input',
-    'checkbox-changed',
-    'passwordChallengeCompleted',
-    'passwordChallengeFailed'
-  ],
+  emits: ['cancel', 'confirm', 'confirm-secondary', 'input', 'checkbox-changed'],
   setup() {
     const primaryButton = ref(null)
     const secondaryButton = ref(null)
diff --git a/packages/web-app-files/src/components/Modals/SetLinkPasswordModal.vue b/packages/web-app-files/src/components/Modals/SetLinkPasswordModal.vue
new file mode 100644
index 00000000000..b1fb9f2195a
--- /dev/null
+++ b/packages/web-app-files/src/components/Modals/SetLinkPasswordModal.vue
@@ -0,0 +1,105 @@
+<template>
+  <oc-text-input
+    :model-value="password"
+    :label="$gettext('Password')"
+    type="password"
+    :password-policy="inputPasswordPolicy"
+    :generate-password-method="inputGeneratePasswordMethod"
+    :fix-message-line="true"
+    :placeholder="link.password ? '●●●●●●●●' : null"
+    :error-message="errorMessage"
+    @password-challenge-completed="confirmDisabled = false"
+    @password-challenge-failed="confirmDisabled = true"
+    @keydown.enter.prevent="onConfirm"
+    @update:model-value="onInput"
+  />
+  <div class="oc-flex oc-flex-right oc-flex-middle oc-mt-m">
+    <oc-button
+      class="oc-modal-body-actions-cancel oc-ml-s"
+      appearance="outline"
+      variation="passive"
+      @click="onCancel"
+      >{{ $gettext('Cancel') }}
+    </oc-button>
+    <oc-button
+      class="oc-modal-body-actions-confirm oc-ml-s"
+      appearance="filled"
+      variation="primary"
+      :disabled="confirmDisabled"
+      @click="onConfirm"
+      >{{ link.password ? $gettext('Apply') : $gettext('Set') }}
+    </oc-button>
+  </div>
+</template>
+
+<script lang="ts">
+import { defineComponent, ref, unref, PropType } from 'vue'
+import { useGettext } from 'vue3-gettext'
+import { useClientService, usePasswordPolicyService, useStore } from '@ownclouders/web-pkg'
+import { Share } from '@ownclouders/web-client/src/helpers'
+
+export default defineComponent({
+  name: 'SetLinkPasswordModal',
+  props: {
+    link: { type: Object as PropType<Share>, required: true }
+  },
+  setup(props, { expose }) {
+    const store = useStore()
+    const clientService = useClientService()
+    const passwordPolicyService = usePasswordPolicyService()
+    const { $gettext } = useGettext()
+
+    const password = ref('')
+    const errorMessage = ref<string>()
+    const confirmDisabled = ref(true)
+
+    const onInput = (value: string) => {
+      password.value = value
+      errorMessage.value = undefined
+    }
+
+    const onConfirm = async () => {
+      try {
+        await store.dispatch('Files/updateLink', {
+          id: props.link.id,
+          client: clientService.owncloudSdk,
+          params: { ...props.link, password: unref(password) }
+        })
+        store.dispatch('hideModal')
+        store.dispatch('showMessage', {
+          title: $gettext('Link was updated successfully')
+        })
+      } catch (e) {
+        // Human-readable error message is provided, for example when password is on banned list
+        if (e.statusCode === 400) {
+          errorMessage.value = $gettext(e.message)
+          return
+        }
+
+        store.dispatch('showErrorMessage', {
+          title: $gettext('Failed to update link'),
+          error: e
+        })
+      }
+    }
+
+    const onCancel = () => {
+      store.dispatch('hideModal')
+    }
+
+    expose({ onConfirm, onCancel })
+
+    return {
+      password,
+      confirmDisabled,
+      onInput,
+      onConfirm,
+      onCancel,
+      errorMessage,
+      passwordPolicyService,
+      inputPasswordPolicy: passwordPolicyService.getPolicy(),
+      inputGeneratePasswordMethod: () => passwordPolicyService.generatePassword()
+    }
+  }
+})
+</script>
diff --git a/packages/web-app-files/src/components/SideBar/Shares/FileLinks.vue b/packages/web-app-files/src/components/SideBar/Shares/FileLinks.vue
index 6f95a378125..d5702ab7952 100644
--- a/packages/web-app-files/src/components/SideBar/Shares/FileLinks.vue
+++ b/packages/web-app-files/src/components/SideBar/Shares/FileLinks.vue
@@ -143,6 +143,7 @@ import {
 import DetailsAndEdit from './Links/DetailsAndEdit.vue'
 import NameAndCopy from './Links/NameAndCopy.vue'
 import CreateQuickLink from './Links/CreateQuickLink.vue'
+import SetLinkPasswordModal from '../../Modals/SetLinkPasswordModal.vue'
 import { getLocaleFromLanguage } from '@ownclouders/web-pkg'
 import {
   Resource,
@@ -269,28 +270,14 @@ export default defineComponent({
       }
     }
 
-    const showQuickLinkPasswordModal = (params) => {
-      const modal = {
+    const showPasswordModal = (params) => {
+      return store.dispatch('createModal', {
         variation: 'passive',
         title: $gettext('Set password'),
-        cancelText: $gettext('Cancel'),
-        confirmText: $gettext('Set'),
-        hasInput: true,
-        inputDescription: $gettext('Passwords for links are required.'),
-        inputPasswordPolicy: passwordPolicyService.getPolicy(),
-        inputGeneratePasswordMethod: () => passwordPolicyService.generatePassword(),
-        inputLabel: $gettext('Password'),
-        inputType: 'password',
-        onInput: () => store.dispatch('setModalInputErrorMessage', ''),
-        onPasswordChallengeCompleted: () => store.dispatch('setModalConfirmButtonDisabled', false),
-        onPasswordChallengeFailed: () => store.dispatch('setModalConfirmButtonDisabled', true),
-        onCancel: () => store.dispatch('hideModal'),
-        onConfirm: (newPassword: string) => {
-          return updatePublicLink({ params: { ...params, password: newPassword } })
-        }
-      }
-
-      return store.dispatch('createModal', modal)
+        hideActions: true,
+        customComponent: SetLinkPasswordModal,
+        customComponentAttrs: { link: params }
+      })
     }
 
     return {
@@ -316,7 +303,7 @@ export default defineComponent({
       canEditLink,
       expirationRules,
       updatePublicLink,
-      showQuickLinkPasswordModal,
+      showPasswordModal,
       defaultLinkPermissions,
       addNewLink
     }
@@ -465,7 +452,7 @@ export default defineComponent({
       }
 
       if (!link.password && !this.canDeletePublicLinkPassword(link)) {
-        this.showQuickLinkPasswordModal(params)
+        this.showPasswordModal(params)
       } else {
         this.updatePublicLink({ params })
       }
diff --git a/packages/web-app-files/src/components/SideBar/Shares/Links/DetailsAndEdit.vue b/packages/web-app-files/src/components/SideBar/Shares/Links/DetailsAndEdit.vue
index e1fa5f0a2c8..081bd9c6af4 100644
--- a/packages/web-app-files/src/components/SideBar/Shares/Links/DetailsAndEdit.vue
+++ b/packages/web-app-files/src/components/SideBar/Shares/Links/DetailsAndEdit.vue
@@ -154,7 +154,8 @@ import * as EmailValidator from 'email-validator'
 import {
   createLocationSpaces,
   useConfigurationManager,
-  LinkRoleDropdown
+  LinkRoleDropdown,
+  useStore
 } from '@ownclouders/web-pkg'
 import {
   linkRoleInternalFile,
@@ -170,6 +171,7 @@ import { createFileRouteOptions } from '@ownclouders/web-pkg'
 import { OcDrop } from 'design-system/src/components'
 import { usePasswordPolicyService, ExpirationRules } from '@ownclouders/web-pkg'
 import { useGettext } from 'vue3-gettext'
+import SetLinkPasswordModal from '../../../Modals/SetLinkPasswordModal.vue'
 
 export default defineComponent({
   name: 'DetailsAndEdit',
@@ -210,7 +212,8 @@ export default defineComponent({
   },
   emits: ['removePublicLink', 'updateLink'],
   setup(props, { emit }) {
-    const { current } = useGettext()
+    const store = useStore()
+    const { $gettext, current } = useGettext()
     const configurationManager = useConfigurationManager()
     const passwordPolicyService = usePasswordPolicyService()
 
@@ -236,6 +239,16 @@ export default defineComponent({
       })
     }
 
+    const showPasswordModal = () => {
+      return store.dispatch('createModal', {
+        variation: 'passive',
+        title: props.link.password ? $gettext('Edit password') : $gettext('Add password'),
+        hideActions: true,
+        customComponent: SetLinkPasswordModal,
+        customComponentAttrs: { link: props.link }
+      })
+    }
+
     return {
       space: inject<Ref<SpaceResource>>('space'),
       resource: inject<Ref<Resource>>('resource'),
@@ -244,7 +257,8 @@ export default defineComponent({
       updateLink,
       updateSelectedRole,
       currentLinkRole,
-      isRunningOnEos: computed(() => configurationManager.options.isRunningOnEos)
+      isRunningOnEos: computed(() => configurationManager.options.isRunningOnEos),
+      showPasswordModal
     }
   },
   data() {
@@ -503,38 +517,6 @@ export default defineComponent({
       this.createModal(modal)
     },
 
-    showPasswordModal() {
-      const modal = {
-        variation: 'passive',
-        title: this.link.password ? this.$gettext('Edit password') : this.$gettext('Add password'),
-        cancelText: this.$gettext('Cancel'),
-        confirmText: this.link.password ? this.$gettext('Apply') : this.$gettext('Set'),
-        hasInput: true,
-        confirmDisabled: true,
-        inputLabel: this.$gettext('Password'),
-        inputPasswordPolicy: this.passwordPolicyService.getPolicy(),
-        inputGeneratePasswordMethod: () => this.passwordPolicyService.generatePassword(),
-        inputPlaceholder: this.link.password ? '●●●●●●●●' : null,
-        inputType: 'password',
-        onCancel: this.hideModal,
-        onInput: () => this.setModalInputErrorMessage(''),
-        onPasswordChallengeCompleted: () => this.setModalConfirmButtonDisabled(false),
-        onPasswordChallengeFailed: () => this.setModalConfirmButtonDisabled(true),
-        onConfirm: (password) => {
-          this.updateLink({
-            link: {
-              ...this.link,
-              password
-            },
-            onSuccess: () => {
-              this.hideModal()
-            }
-          })
-        }
-      }
-      this.createModal(modal)
-    },
-
     toggleNotifyUploads() {
       if (this.currentLinkNotifyUploads) {
         this.$emit('updateLink', {
diff --git a/packages/web-app-files/tests/unit/components/Modals/SetLinkPasswordModal.spec.ts b/packages/web-app-files/tests/unit/components/Modals/SetLinkPasswordModal.spec.ts
new file mode 100644
index 00000000000..7e98599e2a6
--- /dev/null
+++ b/packages/web-app-files/tests/unit/components/Modals/SetLinkPasswordModal.spec.ts
@@ -0,0 +1,54 @@
+import SetLinkPasswordModal from '../../../../src/components/Modals/SetLinkPasswordModal.vue'
+import {
+  createStore,
+  defaultComponentMocks,
+  defaultPlugins,
+  defaultStoreMockOptions,
+  shallowMount
+} from 'web-test-helpers'
+
+describe('SetLinkPasswordModal', () => {
+  it('should render a text input field for the password', () => {
+    const { wrapper } = getWrapper()
+
+    expect(wrapper.find('oc-text-input-stub').exists()).toBeTruthy()
+  })
+  describe('method "onConfirm"', () => {
+    it('updates the link', async () => {
+      const { wrapper, storeOptions } = getWrapper()
+      await wrapper.vm.onConfirm()
+
+      expect(storeOptions.modules.Files.actions.updateLink).toHaveBeenCalled()
+      expect(storeOptions.actions.showMessage).toHaveBeenCalled()
+    })
+    it('shows an error message on error', async () => {
+      const { wrapper, storeOptions } = getWrapper()
+      storeOptions.modules.Files.actions.updateLink.mockRejectedValue(new Error(''))
+      await wrapper.vm.onConfirm()
+
+      expect(storeOptions.actions.showErrorMessage).toHaveBeenCalled()
+    })
+  })
+})
+
+function getWrapper({ link = {} } = {}) {
+  const mocks = { ...defaultComponentMocks() }
+
+  const storeOptions = defaultStoreMockOptions
+  const store = createStore(storeOptions)
+
+  return {
+    mocks,
+    storeOptions,
+    wrapper: shallowMount(SetLinkPasswordModal, {
+      props: {
+        link
+      },
+      global: {
+        plugins: [...defaultPlugins(), store],
+        mocks,
+        provide: mocks
+      }
+    })
+  }
+}
diff --git a/packages/web-runtime/src/App.vue b/packages/web-runtime/src/App.vue
index a3c46b7b24d..8a2bf3612a3 100644
--- a/packages/web-runtime/src/App.vue
+++ b/packages/web-runtime/src/App.vue
@@ -16,8 +16,6 @@
       :has-input="modal.hasInput"
       :input-description="modal.inputDescription"
       :input-placeholder="modal.inputPlaceholder"
-      :input-password-policy="modal.inputPasswordPolicy"
-      :input-generate-password-method="modal.inputGeneratePasswordMethod"
       :input-disabled="modal.inputDisabled"
       :input-error="modal.inputError"
       :input-label="modal.inputLabel"
@@ -38,8 +36,6 @@
       @input="modal.onInput"
       @checkbox-changed="modal.onCheckboxValueChanged"
       @confirm-secondary="onModalConfirmSecondary"
-      @passwordChallengeCompleted="modal.onPasswordChallengeCompleted"
-      @passwordChallengeFailed="modal.onPasswordChallengeFailed"
       @mounted="focusModal"
       @before-unmount="focusModal"
     >
diff --git a/packages/web-runtime/src/store/modal.ts b/packages/web-runtime/src/store/modal.ts
index 6a871a5a221..b0c063bc8b5 100644
--- a/packages/web-runtime/src/store/modal.ts
+++ b/packages/web-runtime/src/store/modal.ts
@@ -72,8 +72,6 @@ const mutations = {
     state.onConfirm = modal.onConfirm
     state.hasInput = modal.hasInput || false
     state.inputValue = modal.inputValue || null
-    state.inputPasswordPolicy = modal.inputPasswordPolicy || {}
-    state.inputGeneratePasswordMethod = modal.inputGeneratePasswordMethod || null
     state.inputSelectionRange = modal.inputSelectionRange
     state.inputDescription = modal.inputDescription || null
     state.inputPlaceholder = modal.inputPlaceholder || null
@@ -89,8 +87,6 @@ const mutations = {
     state.customComponent = modal.customComponent
     state.customComponentAttrs = modal.customComponentAttrs
     state.customContent = modal.customContent || ''
-    state.onPasswordChallengeCompleted = modal.onPasswordChallengeCompleted
-    state.onPasswordChallengeFailed = modal.onPasswordChallengeFailed
     state.hideActions = modal.hideActions || false
   },
 
diff --git a/packages/web-test-helpers/src/mocks/store/filesModuleMockOptions.ts b/packages/web-test-helpers/src/mocks/store/filesModuleMockOptions.ts
index 95f838c0b1a..7c64c74134c 100644
--- a/packages/web-test-helpers/src/mocks/store/filesModuleMockOptions.ts
+++ b/packages/web-test-helpers/src/mocks/store/filesModuleMockOptions.ts
@@ -47,6 +47,7 @@ export const filesModuleMockOptions = {
       loadVersions: jest.fn(),
       loadShares: jest.fn(),
       deleteShare: jest.fn(),
+      updateLink: jest.fn(),
       clearTrashBin: jest.fn(),
       removeFilesFromTrashbin: jest.fn(),
       changeShare: jest.fn(),