diff --git a/doc/whats-new.rst b/doc/whats-new.rst
index 151ed9da105..8865eb98481 100644
--- a/doc/whats-new.rst
+++ b/doc/whats-new.rst
@@ -23,6 +23,9 @@ v2024.02.0 (unreleased)
 New Features
 ~~~~~~~~~~~~
 
+- Xarray now defers to flox's `heuristics <https://flox.readthedocs.io/en/latest/implementation.html#heuristics>`_
+  to set default `method` for groupby problems. This only applies to ``flox>=0.9``.
+  By `Deepak Cherian <https://github.com/dcherian>`_.
 
 Breaking changes
 ~~~~~~~~~~~~~~~~
diff --git a/xarray/core/groupby.py b/xarray/core/groupby.py
index ebb488d42c9..3a9c3ee6470 100644
--- a/xarray/core/groupby.py
+++ b/xarray/core/groupby.py
@@ -16,6 +16,7 @@
 
 import numpy as np
 import pandas as pd
+from packaging.version import Version
 
 from xarray.core import dtypes, duck_array_ops, nputils, ops
 from xarray.core._aggregations import (
@@ -1003,6 +1004,7 @@ def _flox_reduce(
         **kwargs: Any,
     ):
         """Adaptor function that translates our groupby API to that of flox."""
+        import flox
         from flox.xarray import xarray_reduce
 
         from xarray.core.dataset import Dataset
@@ -1014,10 +1016,11 @@ def _flox_reduce(
         if keep_attrs is None:
             keep_attrs = _get_keep_attrs(default=True)
 
-        # preserve current strategy (approximately) for dask groupby.
-        # We want to control the default anyway to prevent surprises
-        # if flox decides to change its default
-        kwargs.setdefault("method", "cohorts")
+        if Version(flox.__version__) < Version("0.9"):
+            # preserve current strategy (approximately) for dask groupby
+            # on older flox versions to prevent surprises.
+            # flox >=0.9 will choose this on its own.
+            kwargs.setdefault("method", "cohorts")
 
         numeric_only = kwargs.pop("numeric_only", None)
         if numeric_only:
diff --git a/xarray/tests/test_groupby.py b/xarray/tests/test_groupby.py
index e45d8ed0bef..25fabd5e2b9 100644
--- a/xarray/tests/test_groupby.py
+++ b/xarray/tests/test_groupby.py
@@ -3,10 +3,12 @@
 import datetime
 import operator
 import warnings
+from unittest import mock
 
 import numpy as np
 import pandas as pd
 import pytest
+from packaging.version import Version
 
 import xarray as xr
 from xarray import DataArray, Dataset, Variable
@@ -2499,3 +2501,20 @@ def test_groupby_dim_no_dim_equal(use_flox):
         actual1 = da.drop_vars("lat").groupby("lat", squeeze=False).sum()
         actual2 = da.groupby("lat", squeeze=False).sum()
     assert_identical(actual1, actual2.drop_vars("lat"))
+
+
+@requires_flox
+def test_default_flox_method():
+    import flox.xarray
+
+    da = xr.DataArray([1, 2, 3], dims="x", coords={"label": ("x", [2, 2, 1])})
+
+    result = xr.DataArray([3, 3], dims="label", coords={"label": [1, 2]})
+    with mock.patch("flox.xarray.xarray_reduce", return_value=result) as mocked_reduce:
+        da.groupby("label").sum()
+
+    kwargs = mocked_reduce.call_args.kwargs
+    if Version(flox.__version__) < Version("0.9.0"):
+        assert kwargs["method"] == "cohorts"
+    else:
+        assert "method" not in kwargs