diff --git a/awx_collection/plugins/modules/tower_settings.py b/awx_collection/plugins/modules/tower_settings.py
index c706c4f0f9..9db41d9975 100644
--- a/awx_collection/plugins/modules/tower_settings.py
+++ b/awx_collection/plugins/modules/tower_settings.py
@@ -80,6 +80,10 @@ except ImportError:
 
 
 def coerce_type(module, value):
+    # If our value is already None we can just return directly
+    if value is None:
+        return value
+
     yaml_ish = bool((
         value.startswith('{') and value.endswith('}')
     ) or (
diff --git a/awx_collection/tests/integration/targets/tower_settings/tasks/main.yml b/awx_collection/tests/integration/targets/tower_settings/tasks/main.yml
index a02ca673de..8a42f5768e 100644
--- a/awx_collection/tests/integration/targets/tower_settings/tasks/main.yml
+++ b/awx_collection/tests/integration/targets/tower_settings/tasks/main.yml
@@ -74,3 +74,14 @@
 - assert:
     that:
       - "result is changed"
+
+- name: Handle an omit value
+  tower_settings:
+    name: AWX_PROOT_BASE_PATH
+    value: '{{ junk_var | default(omit) }}'
+  register: result
+  ignore_errors: true
+
+- assert:
+    that:
+      - "'Unable to update settings' in result.msg"